Putting analytics and Dogecoin in the same sentence feels a bit like putting ketchup on pasta — it just doesn’t seem right. Unless you have a mind reader hooked up to Elon Musk’s brain, any attempt to analyze the world’s favorite memecoin can seem futile. That said, that’s exactly what I’m doing here.
Since last Monday, when Elon Musk promised he “wouldn’t sell” his Doge holdings, the cryptocurrency has returned to the spotlight. Its price, naturally, jumped:
Dogecoin since Elon Musk tweeted he wouldn’t sell, chart via CoinMarketCap
Controversy
It wouldn’t be Dogecoin without controversy. Crypto “influencer” Matt Wallace — a term that still feels vague in crypto circles and personally makes me uneasy — faced criticism for claiming to promote Dogecoin payments among retailers while actually raising funds for a new token called Accept Dogecoin instead of promoting Doge itself.
Needless to say, Dogecoin’s creator Billy Markus (better known on Twitter as Shibetoshi Nakamoto) was not pleased.
https://twitter.com/BillyM2k/status/1506443665245413382?s=20&t=ObgOQHiDwDcW1q-voLJRqg
Billy’s response
Reaction
Despite the Twitter spats and unabashed self-promotion, there remains a dedicated army of Doge supporters who have moved this cryptocurrency significantly in the past. More than most assets, memecoins demand attention to sentiment and social engagement before drawing conclusions about price. Looking at Telegram activity below, positive sentiment has returned since Elon affirmed his support, with price and positivity rising together and reinforcing one another.
Telegram sentiment recently strengthened for Doge following Elon’s tweet and Billy’s defense, data via IntoTheBlock
Correlation
If we didn’t already know, Doge operates in its own world when social media hype builds. Reason and rhyme often get thrown out the window. Although this mini-rally driven by Elon’s tweet and the subsequent controversy with Billy Markus isn’t on the scale of past explosive moves, it still shows there’s life left in the old dog (pun intended).
The best way to illustrate this is the drop in correlation with Bitcoin over the past ten days. This wasn’t a macro-driven move for Doge — it was inspired by Elon and specific to Dogecoin rather than the broader crypto market. What’s intriguing this time is that Elon also said he wouldn’t sell his Bitcoin or Ethereum in the same tweet, yet those assets did not trigger the same reaction.
This highlights how little Doge actually has in common with Bitcoin or Ethereum. Doge is a memecoin; the other two are serious assets trying to solve real problems. That said, despite differing fundamentals, the correlation between Doge and Bitcoin remains moderately high at 0.42 in the longer term.
Dogecoin’s correlation fell over the past ten days, underscoring that its move was Elon-inspired rather than macro-driven, data via IntoTheBlock
As a general principle, for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.
I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.
— Elon Musk (@elonmusk) March 14, 2022
Momentum
It seems the world had somewhat forgotten Dogecoin. But looking at on-chain volume and social sentiment, the signs are bullish. Of course, Doge has never been particularly logical, so that observation should be taken with a grain of salt. Still, it’s interesting.
Finally, the share of addresses in profit is now around 58% after the recent move, as shown in the chart below. This metric tends to be particularly relevant for memecoins: investors often know their entry point precisely, which can create selling pressure from out-of-the-money addresses once price reaches breakeven.
However, the recent rise shifted the balance toward more addresses being in profit, likely easing some selling pressure and potentially setting the stage for new momentum.
Addresses in profit are now at 58% after the recent rise, chart via IntoTheBlock
Again, as I said at the start — ketchup on pasta. Who knows?