Dogecoin (DOGE -1.49%) is certainly causing plenty of investor intrigue this weekend, with one of the biggest moves in the top 10. cryptocurrencies on the market. The dog-inspired meme token surged more than 16% between Friday at 4 p.m. ET and Saturday morning’s peak, before giving up the vast majority of those gains on Sunday. Investors appear to be taking profits after an incredible surge that saw Dogecoin breach the $0.48 level over the weekend.
Now, it’s worth noting that at this weekend’s high, which represented a multi-year high for the meme token, Dogecoin was about 50% away from breaking a new all-time high. And given the impressive momentum of this token and the movements seen in the crypto sector in recent weeks, other notable large-cap projects have reached key milestones. psychological levels and reaching new all-time highs, there are many reasons why investors continue to become more bullish on Dogecoin, surpassing the previous high of just over $0.73 per token.
Let’s take a look at what’s driving this move and where Dogecoin could be heading from here.
Meme chips burst and fall
The investment landscape for most cryptocurrencies is one that any investor would identify as volatile. For Dogecoin, a project that has benefited from some strong politically impregnated favorable windsthis development is rather positive, at least since the re-election of Donald Trump as president.
As a very supportive figure in the crypto movement, Donald Trump has already adopted a number of policies that would benefit the crypto sector as a whole, and particularly for projects based in the United States. And with Elon Musk at the helm of the so-called “Department of Government Efficiency” (DOGE), investors are betting that the world’s richest man’s continued comments around Dogecoin could propel this token even higher to leave here.
However, Sunday’s selling pressure appears to offer some breathing room for investors looking to bet on this meme token, which is likely to reach all-time highs. The crypto market plunged on Sunday amid industry-wide profit-taking as a new week arrived. And as I’ll return to below, some rather bearish liquidation data has started to trickle in, suggesting that forced selling could lead to at least part of today’s rally for Dogecoin.
Where does Dogecoin go from here?
This weekend’s price action could indicate what investors are likely to see in the future. In my opinion, Saturday’s pop that took Dogecoin to three-year highs is emblematic of the incredible bullish momentum that Donald Trump and Elon Musk have provided to projects like Dogecoin.
However, Sunday’s drop suggests that leveraged bets on the upside on Dogecoin are being canceled out much more, and this is proven by the most recent 24-hour data on crypto liquidations. Around $21 million in long Dogecoin derivatives bets were liquidated over the past day, compared to around $7 million in bearish bets liquidated over the same period. In other words, the forced sell-off is at least partly responsible for the rapid decline that Dogecoin investors have seen from new multi-year highs.
I think Dogecoin will remain one of the top tokens to watch in the coming days, and I expect to see what happens next volatility with this project will take shape in the coming weeks. This remains a top crypto project that only those with the fortitude to endure this type of intense volatility may want to look into. But it’s also a project that’s certainly fun to watch from the sidelines, and as Elon Musk has attested in the past, you have to invest some money to see where it goes.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.