The crypto market seems to have been surprised by yesterday’s season. Dogecoin (DOGE) threw all fundamentals out the window and made it to 5th place in the Crypto Top 10 by market capitalization. DOGE is trading at USD 0.27 with a 20.6% loss on the daily chart.
DOGE with heavy losses on the 24-hour chart. Source: DOGEUSDT Tradingview
DOGE hit an all-time high of $ 0.50 after a 500% pump. CoinShares Chief Strategy Officer Meltem Demiros linked the Dogecoin surge to the controversial subreddit r / WallStreetBets.
This group decided to lift the ban on crypto discussions. These were still only limited to Bitcoin, Ethereum, and DOGE.
However, the group decides to reinstate their ban in less than a day based on an article published by Bloomberg announced on their subreddit. With the title “WallStreetBets Bows to Crypto” the decision of the article and the moderator caused discomfort in this community.
As a kind of “revenge pump”, WallStreetBets could have caused the DOGE rally. As proof, Demiros pointed to the trading volume of the cryptocurrency. At the peak of DOGE, the daily trading volume was $ 70,772,770,653 as shown by CoinGecko, with a market cap of $ 48 billion.
By comparison, State Street Global Advisors’ SPY ETF, one of the “most widely distributed and traded,” according to Demiros, recorded around $ 25 billion on that metric during the April 17 session. CoinShares CSO also referred to the Dogecoin repository on GitHub with many posts over the past year:
People have spoken and people want DOGE. The power of memes moves markets. You absolutely love to see it. It’s going to break people’s brains and we’re just getting started. To all @TikTokInvestors who are now $ DOGE millionaires, cheers.
Coinbase Effect and Bitcoin Price
Bitcoin’s price appears to be trending lower after bullish momentum that led to Coinbase’s debut on the exchange. At the time of writing, BTC is trading at $ 60,174, down 1.9% on the 24-hour chart and 3.6% over the past week.
BTC with moderate losses on the 24-hour chart. Source: BTCUSD Tradingview
During this time, many investors were confident that Coinbase’s direct offering would support a pump across the crypto market. The opposite happened. As Demiros noted, this is due to the high leverage position in the derivatives market.
When Bitcoin was unable to pump due to the Coinbase debut, the leverage traders “dived” and closed their positions. Demiros said the following about this crypto market dynamic:
One-bitcoin markets are heavily powered by derivatives. Funding rates, implied volume, and open interest are important for monitoring. Point follows future -> tail wagging dog. Second, the leverage is insufficient and the cost of capital is limiting the capacity!
Glassnode data continues to suggest an optimistic outlook for BTC. The Realized Cap HOLD Waves metric indicates the first peak in the number of short-term holders brought to market by retail craze.
In previous bull runs there were at least 3 peaks for the same metric. This could indicate that the rally is still early and the price of BTC could rise much more if it follows an earlier pattern, as shown below.
Each #Bitcoin Bull Cycle had 3 different supply spikes that were held by short-term holders. (in% of the total offer)
We’re still cooling off after the first big climax. pic.twitter.com/g9M8G4mPrK
– William Clemente III (@WClementeIII) April 17, 2021