If we are to believe the analysts at BeInCrypto, then the future success of Dogecoin largely depends on Bitcoin. According to the platform’s analysts, there is a 65% chance of a rally for Dogecoin, but for that to happen, Bitcoin has to behave in the right way.
Sentiment around Dogecoin remains bullish
Despite the stagnation we are currently seeing in the Dogecoin price, the sentiment surrounding Dogecoin remains predominantly bullish according to BeInCrypto. “The Global In/Out of the Money (GIOM) indicator shows that around 60.72 billion Dogecoin tokens are close to a virtual profit.”
The tokens were purchased between the prices of $0.101 and $0.130. “Historically, this has been a crucial support and resistance zone for the Dogecoin price. There is optimism, as all DOGE price dips have been met with substantial interest from buyers.”
Furthermore, the macro momentum (the momentum of the price in the longer term) is mainly influenced by Bitcoin. “The two cryptocurrencies share a high correlation of 0.92 points. This means that the price movements of Dogecoin are strongly synchronized with the performance of Bitcoin,” according to the analysts of BeInCrypto.
Bitcoin’s Influence on Dogecoin
“Bitcoin’s recent price behavior is a mix of consolidation and small uptrends, putting DOGE in a similar pattern. However, a new Bitcoin price correction could also halt a Dogecoin rally, making BTC’s performance crucial for Dogecoin’s near future.”
The above graph shows the correlation between Dogecoin and the Bitcoin price. It currently stands at 0.92 points. In fact, this score means that the price of Bitcoin is almost identical to that of Dogecoin.
Based on the above chart of Dogecoin, BeInCrypto concludes that the memecoin needs to break above the resistance at $0.118 to start a new rally. Will it succeed? Then a rally to the level of $0.182 should be possible (see green line up).
Currently, there is no sign of a breakout to that level for Dogecoin, as the price enters at $0.0962. This means that the memecoin has seen a hefty drop of 12.03% over the past week, while the Bitcoin price has “only” dropped 8.83% over the same period.
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Source: https://newsbit.nl/het-succes-van-dogecoin-hangt-af-van-bitcoin/
