In the past week, the price of DOGE has surged again, breaking the $0.4 mark and reaching a high of $0.43, setting a new record since June 2021, attracting widespread attention from industry insiders and investors. This article will explore the multiple reasons behind this phenomenon.
Large Wallet Holders Rebuy DOGE
Dogecoin broke the $0.40 barrier yesterday (November 13), and as of now, the market capitalization of DOGE has reached $57.898 billion, surpassing XRP to become the fifth-largest token by market cap in the crypto market. Many traders expressed their astonishment.
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This increase has attracted a surge of new investors and prompted some large investors to reassess their portfolios.
According to wallet dynamics, retail investors' interest in Dogecoin has skyrocketed, with a significant increase in wallet numbers, while some large investors, known as "whales," have recently reduced their holdings. The number of wallets holding less than 100,000 DOGE has increased by nearly 75,000. However, large investors, especially shark and whale wallets, have been reducing their holdings, with a net decrease of 350 wallets in the past four weeks, while small investors are clearly accumulating Dogecoin.
However, in the last two days, large wallet holders have started to rebuy, with 108 larger wallets returning to DOGE. The joint push from retail and large wallet holders is one of the reasons for the further price increase.
Elon Musk's Influence and Market Heating Up
As a staunch supporter of Dogecoin, Elon Musk's statements and actions have a profound impact on its price. Musk proposed the establishment of an agency called the "Department of Government Efficiency" (D.O.G.E) during the Trump administration, aimed at improving the efficiency of government spending.
Trump expressed support for this, promising that if re-elected, he would appoint Musk to lead the department. Additionally, Musk has mentioned this plan multiple times on social media, humorously linking it to Dogecoin, further sparking market interest in DOGE. Although this proposal is not directly related to Dogecoin, its acronym is similar to DOGE, undoubtedly increasing Dogecoin's visibility and appeal among investors.
Since Trump's re-election as President of the United States, market optimism towards cryptocurrencies has further heated up. Trump promised during his campaign to make the U.S. a Bitcoin powerhouse, which has been interpreted as a positive signal for the entire cryptocurrency market. As a result, investors have high hopes for crypto assets, including Dogecoin, driving up its price.
DOGE Outperforming BTC in TradFi
Musk previously stated in an interview, "Dogecoin is more suitable for transactions compared to Bitcoin."
Compared to Bitcoin, Dogecoin has lower transaction costs, making it the preferred transfer tool for some users. For example, some users choose to use Dogecoin for international remittances because it is more cost-effective than using Bitcoin. The increase in such use cases continues to drive up market demand for DOGE.
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Despite Dogecoin's impressive recent performance, its future trajectory remains uncertain. The continued price increase relies on investor sentiment and ongoing market attention towards Dogecoin. If large investors sell off again or market sentiment shifts, it could negatively impact its price. If retail investors maintain their enthusiasm and large wallet holders continue to repurchase, Dogecoin may continue its upward momentum.
Conclusion
The recent rise of Dogecoin is the result of multiple factors, including Elon Musk's support, a positive shift in market sentiment, and other driving forces. There is uncertainty ahead, but the current trend shows that Dogecoin still holds strong appeal in the cryptocurrency market. Investors should remain cautious and manage risks as they participate. With the market's development, the future of Dogecoin remains full of possibilities.
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