Dogecoin (DOGE) Price Drops 4% Amid Meme Coin Slump, What’s Behind The Underperformance?

Dogecoin Price Drops 4% Amid Meme Coin Slump

While other meme coins like PEPE Coin and Dogfi have surged recently, Dogecoin (DOGE), the largest meme coin, has performed poorly. Over the past 24 hours, DOGE has fallen another 4% to below $0.16, reflecting a broader decline in the meme coin sector.

Factors Behind Dogecoin's Underperformance

Market analyst Ali Martinez notes a key resistance zone for DOGE between $0.166 and $0.171. If DOGE can break above this level, it could potentially double in value, targeting the next resistance at $0.322.

However, demand for Dogecoin has declined recently, while PEPE and WIF have rallied. According to IntoTheBlock, the number of daily addresses involved in DOGE transactions has dropped by 18% in the last week. New addresses created to trade DOGE have also decreased by 21%.

A decline in active and new addresses indicates lower overall trading volume. Santiment's data shows that DOGE's daily trading volume peaked at $3.01 billion on May 24 but has since fallen by 53%.

Trader Buys 2 Million DOGE Call Options

On May 29, a cryptocurrency trader purchased 2 million Dogecoin call options with a strike price of $0.22, expiring on June 14. This means DOGE would need to rise by 31% from current levels for the options to become profitable.

Bernd Sischka, chief commercial officer at derivatives exchange PowerTrade, believes altcoins have been lagging behind Ethereum's recent rally. He suggests that investors may be following Ethereum's lead and speculating on potential moves in altcoins. However, he adds that Dogecoin could be influenced by Elon Musk's decision to potentially incorporate it as a payment currency on Twitter.