Key Points
- Historical data suggests a potential price hike for Dogecoin due to negative sentiment.
- Decrease in social volume may offer a buying opportunity for the cryptocurrency.
The Weighted Sentiment for Dogecoin (DOGE) has reached -1.562, a level not seen since September 2023. Weighted Sentiment refers to the average comments about an asset on social media.
The Shiba Inu dog, Kabosu, which inspired Dogecoin, passed away on 24 May, leading to an increase in positive commentary about DOGE. However, the data also indicates that for every positive comment, there were 1.56 negative ones.
Negative Sentiment and Price Hike
Despite the negative sentiment, history suggests that Dogecoin’s price may rise. In September 2023, when the sentiment was similarly negative, DOGE’s price was $0.064, which later rose to $0.097 in less than three months. This phenomenon, known as a “hated rally,” occurs when a negative view of a cryptocurrency fuels a price hike.
If the pattern repeats, DOGE’s price could reach a yearly high of $0.27 before the next quarter. At the time of writing, DOGE is valued at $0.16. Data from IntoTheBlock reveals that 84% of DOGE holders were profitable at this price.
Correlation with Bitcoin
The price potential of Dogecoin might also depend on the movement of Bitcoin (BTC). The correlation between BTC and DOGE is currently 0.86, indicating that Dogecoin moves more strongly with Bitcoin than with other cryptocurrencies.
On-chain data suggests that Bitcoin’s price is now at a good accumulation point, which might imply a similar condition for DOGE. A significant Bitcoin hike could potentially drive DOGE’s price higher.
The social volume of Dogecoin has dropped to 120 from 614, which could indicate a decrease in demand but also a potential buying opportunity due to the uncertainty about the coin’s short-term performance.
