Dogecoin (DOGE), the popular meme cryptocurrency, has seen a significant 24% increase in value over the past week compared to other major tokens like Bitcoin. Despite this positive movement, the DOGE/BTC ratio continues to show a bearish trend, similar to what was seen in late 2020.
Charting platform TradingView indicates that the downtrend in the DOGE/BTC ratio, which started in May 2021, is still ongoing. This suggests that there may not be a speculative bubble similar to what was experienced in 2021. The current bullish trend in Bitcoin (BTC) and the broader crypto market could still have room for growth.
In early 2021, DOGE performed exceptionally well against BTC, leading to a significant uptrend in the DOGE-BTC ratio. However, the market crash in May 2021 caused BTC to drop from $60,000 to as low as $30,000. The perception of Dogecoin as a speculative asset with no intrinsic value often leads to concerns about market instability when its price surges.
Elon Musk’s recent proposal for a government agency named D.O.G.E. has sparked speculation about the potential role of cryptocurrency in future administrations. The recent surge in DOGE’s value may be linked to these developments.
Looking at the weekly candlestick chart for DOGE/BTC, there are signs of a potential recovery from the bear market. The MACD histogram, a technical indicator used to assess trend changes, is showing a bullish shift in momentum. If the price manages to surpass the trendline connecting previous highs, it could indicate the end of the bear market and a potential period of outperformance for DOGE.
In comparison to the price structure in 2020, the current pattern of DOGE/BTC is reminiscent of the prolonged downtrend seen back then. However, if history repeats itself, we could see a breakout similar to what happened in December 2020 when the ratio entered a speculative frenzy mode.
Overall, while Dogecoin has shown significant gains recently, the broader trend indicates a bearish pattern. Investors should continue to monitor the market closely to assess any potential shifts in momentum and trend direction.