Dogecoin’s Price Benefits from Rehabilitated Risk-on Sentiment

The leading meme coin to date, Dogecoin (DOGE), rejoices over renewed bullish energy and “risk on” sentiment. The latter represents a situation in financial markets where investors are willing to invest in an asset regardless of the risks involved as their optimism towards a higher return grows. A range of factors drives this demand and “risk on” sentiment in Dogecoin, such as bullish economic data or stable political circumstances. Regarding the dog-themed coin’s rally, it’s rather an interplay of factors, including the easing trade tensions between China and the U.S. and increasing institutional investments.

As interest in this meme coin keeps rising, so does the importance of grasping the current Dogecoin price trends, prospects, and market behavior. This article covers some of the most critical aspects of the current Dogecoin realm, so keep reading if you are considering engaging with it anytime soon.

Dogecoin Benefits from the Broader Economic Factors

Talks about possible tariff reductions between China and the U.S. held in Geneva yielded favorable results that have pushed meme coin frontrunner Dogecoin, crypto market head Bitcoin, and other cryptos like Solana and XRP up. Easing trade tensions between the two economic leaders has improved investor sentiment, leading to increased risk-taking in markets like crypto, which has contributed to the price surges in Dogecoin.

The Trump administration is supposedly slashing import tariffs for its opponent from 145% to 30%. The same is to be done by China, which is looking to cut down fees on U.S. imports from 125% to 10%. However, the strategy is carried out for three months in order to calm down tensions between the countries. The news was, however, enough to throw Bitcoin, Dogecoin, and stock markets into the green zone.

Notably, data agencies like Santiment advise investors to wait for an official answer from Donald Trump before digging too deep into their pockets to buy. Trade discussions are reportedly making progress, but mere spoken words aren’t enough—official data to back up officials’ statements is necessary.  

DOGE Keeps Escalating

Dogecoin is surging amid a broader ‘risk-on’ rebound in crypto markets. Here are the main factors fueling its surge:

• Whale accumulation. Large investors, also known as “whales,” have been accumulating massive piles of DOGE as of late, a behavior that often indicates bullish momentum. Whales’ buying sessions indicate confidence in the asset’s future performance, and are bound to keep buying until the time to drop the holdings comes among those who aren’t holding for the long term.
• Institutional interest. Institutional investors are breaking into the Dogecoin market in full force. Impressive large-scale transaction numbers indicate a change in the asset’s perception from a simple meme coin to a more relevant investment. These deep-pocketed investors insert a new level of legitimacy and trust into the Dogecoin realm, drawing in a broader range of market players.
• Bullish technical indicators. Analysts are finding some positive tech indicators in DOGE’s price charts, including potential breakouts and higher lows. Moreover, the Relative Strength Index reflects rising momentum, while the narrowing Bollinger Bands hint at a period of reduced volatility. These indicators lure in traders waiting for rising momentum to buy some DOGE and sell later.

The abovementioned factors are creating a favorable environment for Dogecoin, with some analysts predicting further price spikes if the current momentum holds on. Right now, Dogecoin is listed for over $0.23. Nevertheless, as some analysts point out, a potential trend repeat could send the asset toward $1 by the middle of this year.

600MN and More

Deep-pocketed investors are on the hunt for DOGE, with more than 600MN Dogecoin having already been accumulated by this investor category in only 2 days. This hoarding phase syncs with Bitcoin’s latest march above $104K, nearing its ATH of a bit over $109K touched earlier in January. For both, these figures are the highest levels hit recently and follow a period of downturns in the market. Dogecoin, for instance, registered the highest point since February, after rising from a humble price of $0.164 in the first week of May.

Open interest in Dogecoin futures has similarly jumped, hitting $2.85BN thanks to a 10% increase. Open interest in a crypto refers to the number of options, futures, or other outstanding derivative contracts that are yet to be closed or settled. In plain English, this figure shows how many active positions exist within the market. It offers a picture of the entire number of outstanding positions at a certain moment.

The DOGE rally seems encouraged by short-term fund relocations from Bitcoin into super volatile cryptos like meme coins, with traders preferring speculative alternatives as they anticipate the risk-on trend to advance.

The present energy aligns with Dogecoin’s historical behavior, with the asset registering maximized winnings during BTC consolidation periods. The most current performances indicate that Dogecoin’s market depth is increasing.

Dogecoin’s Scheduled Unlocks

Dogecoin’s May is filled with token unlocks, events that usually impact short-term price performances. Almost 96.52MN coins are freed up between May 12 and May 19, estimated at around $22.75MN, as per data from WuBlockchain. It’s only 0.06% of the whole circulating supply, but it’s enough to trigger volatility and pressure to unlock the market in its entirety. Such unlocks are associated with rising selling pressure, all the more if they occur during already-heated times of the market or on poor support levels.

To date, DOGE has proven its potency in terms of technicality prior to previous unlock windows.

Wrapping it Up

Heightened trading activity, bullish investor sentiment, whale accumulation, and favorable technical indicators suggest Dogecoin may be on a winning streak. The bullish sentiment reflected in both futures and options markets indicates that Dogecoin’s rally may be fueled by more than just short-term hype. With momentum building in the broader crypto market, investors are watching Dogecoin closely to assess its ability to regain ground during the continued uptrend.

If you consider investing in crypto, please thoroughly investigate it and the underlying market and calculate your risk tolerance. Crypto is famed for being highly volatile.