As a result of its Coinbase listing and concurrent price increase, Dogecoin’s uptrend is still going strong.
On Wednesday, dogecoin prices surged by roughly 40% on a 24-hour adjusted timeframe, shaking out more than $16 million of bearish leverage in just one hour and nearly regaining its pre-crash high.
After the US-based cryptocurrency trading platform Coinbase Pro announced that it would start allowing DOGE trading on its portal on Thursday, leveraged bearish traders found themselves on the losing end of the market.
The announcement caused an overnight jump in DOGE spot prices that stung speculators who had bet on the cryptocurrency’s price falling.
The DOGE/USD exchange rate increased after beginning Wednesday’s trading day in the green by as much as $0.064, or 17.34%. The pair hit an intraday high of $0.454 before a brief downside retracement driven by profit-takers. DOGE was trading for $0.434 at 12:07 UTC.
Compared to its main rival cryptocurrency, Bitcoin, Dogecoin performed well. In the past 24 hours, the exchange rate between DOGE and Bitcoin increased by 33%, wiping out all of the losses that DOGE had sustained when Bitcoin had its May 19 fall.
Dogecoin short liquidations of $47.83 million have occurred in the last 24 hours.
The tremendous bubble
Dogecoin gained popularity among traders primarily as a result of Elon Musk’s support. The founder and CEO of Tesla frequently tweeted in favor of Dogecoin, even going so far as to jokingly refer to himself as the Dogefather and lately claim to be Dogecoin’s master.
The DOGE/USD price increased by more than 15,300% in 2021, thanks in large part to Musk’s fame, and the cryptocurrency’s market cap reached $92 billion, exceeding even that of Airbnb and Infosys.
However, the price rally‘s hyperbolic acceleration has also stoked FUD—fear, uncertainty, and doubt—about the possibility of a bubble. Dogecoin’s price dropped by 45% throughout the following three daily sessions after Musk referred to it as a hustle on Saturday Night Live on May 8. The market nearly collapsed as a result of the panic that followed.
On May 19, a devastating sell-off affected the entire market, and the sell-off got worse. Dogecoin dropped to a low of $0.29, more than 74% below its peak price of $0.76. According to the Asian Investor, a pseudonymous analyst, Dogecoin is currently in the hype stage, the third stage of a huge bubble, which will shortly be followed by the deflation and panic-selling stages.
Since its low point of $0.29, Dogecoin has increased by roughly 132%.