Musk sparks Dogecoin breakout

August 23, 2024

Reading time: 5 minutes

Dogecoin could break out after Elon Musk’s latest post on X

Key points:

  • Elon Musk's post boosted Dogecoin's social buzz, pushing it to trend on X.

  • Dogecoin's price entered a crucial zone, but long-term holders stayed unaffected.

News - Dogecoin (DOGE) has been moving in a narrow range since mid-August, but a major shift could be on the horizon. This might be because of a recent post from Elon Musk, one that has reignited interest in the memecoin, leading to a noticeable spike in social activity.

Increased social activity - For quite some time, the dog-themed memecoin’s price has been hovering within a wedge pattern. However, it recently surged as a top trend on X (formerly Twitter) following a post from Elon Musk where he responded to a suggestion about creating a "Department of Government Efficiency" (DOGE).

DOGE’s market trend - As per technical analysis, Dogecoin's price is now in a "squeeze zone," one where increased volatility could lead to either a breakout above $0.11, signaling stronger bullish momentum, or a breakdown.

However, despite the price being 53% lower than its Year-to-Date (YTD) high in March, there has been significant accumulation. Number of long-term holders (HODLers) have risen from under 4 million to over 4.3 million. Additionally, there has also been a drop in swing traders. This has made the memecoin more attractive to dip buyers, suggesting that long-term holders could benefit as accumulation continues.

Buterin steps in as BlackRock’s ETHA struggles to push Ethereum’s price

Key points:

  • BlackRock's ETHA excelled with $1 billion inflows, while Grayscale's ETHE faced outflows.

  • Vitalik Buterin continued to defend Ethereum, despite criticism from some quarters.

News - BlackRock’s iShares Ethereum Trust (ETHA) has rapidly emerged as a top player in the Ethereum investment space, reaching over $1 billion in net inflows. However, experts are debating whether this ETF will truly deliver the expected bullish boost for Ethereum’s price.

ETHA vs. ETHE - While ETHA is making news with its inflows record, Grayscale’s ETHE is struggling with persistent outflows. This has resulted in the overall market sentiment for Ethereum ETFs remaining cautious.

Despite ETHA’s significant accumulation, the performance of Ethereum ETFs has been mixed, with concerns about whether the success of ETHA will translate into broader positive trends.

Ethereum’s price, which was expected to surge post-ETF launch, has instead underperformed.

Buterin’s contribution - Seeing the ongoing challenges faced by Ethereum, co-founder Vitalik Buterin shifted from philosophical topics to actively promoting Ethereum. He defended it against criticism of Layer-1 and Layer-2 struggles by highlighting lower transaction fees.

Additionally, the network is also preparing for the Pectra Upgrade in early 2025 to boost performance. However, concerns about Ethereum’s inflation have arisen, with a current inflation rate of 0.72% per year - Challenging its previous deflationary stance.

FOMC minutes spur Bitcoin as rate cut speculation mounts

Key points:

  • FOMC minutes hinted at a September rate cut, boosting Bitcoin’s value.

  • Bitcoin climbed to $61,189 but may face resistance near $64K-$66K.

News - The FOMC minutes from the 30-31 July meeting indicated a likely interest rate cut in September, marking the first reduction since 2020. Investors are split, with 69% expecting a 25 basis point cut and 30% anticipating a 50 basis point reduction. This shift in policy has generated notable ripples across financial markets, especially within the cryptocurrency sector.

Impact on Bitcoin - Following the release of the FOMC minutes, which highlighted a likely interest rate cut in September, Bitcoin's price surged to $61,189, driven by investor optimism about the prospect of lower rates.

Although Bitcoin initially spiked, its price settled at approximately $60,890.81 later. However, the hike in trading volumes by 26% reflected growing market interest and heightened buying activity.

What’s more? The Chaikin Money Flow (CMF) index, showed a notable spike, indicating increased buying interest following the FOMC minutes’ release. Additionally, the Awesome Oscillator (AO) also displayed a positive trend, even though it requires further validation to confirm the strength of the uptrend.

Meanwhile, Bitcoin’s key resistance seemed to be positioned between $64K and $66K. This is a range where substantial buying has previously occurred, potentially attracting sellers if the price approaches these levels.

All in all, the FOMC minutes have created a favorable short-term outlook for Bitcoin due to anticipated interest rate cuts. And yet, the market remains cautious, with technical indicators flashing mixed signals.

Cardano’s Hoskinson slams Harris’s approach to crypto-regulations

Key points:

  • Hoskinson denounced VP Harris for unclear crypto policies and prior regulatory actions.

  • Trump’s support for crypto has been contrary to Harris’s position.

News - Charles Hoskinson, founder of Cardano (ADA), has sharply criticized Vice President Kamala Harris and the Democratic Party for their approach to cryptocurrency regulations.

He highlighted the administration's aggressive stance against the industry. Additionally, he is also concerned about how cryptocurrency regulations might evolve under a potential Harris presidency.

Hoskinson’s skepticism - In fact, Hoskinson continued to remain skeptical despite Brian Nelson, an aide associated with the Harris campaign, talking about VP Harris’s support for emerging technologies. He criticized the administration for regulating crypto harshly over the last three years and the lack of clarity on cryptocurrency policies.

According to Hoskinson, the crypto industry needs more than just promises and rhetoric. It requires clear, actionable strategies to address the regulatory challenges it faces, he said.

The political divide - Former President Donald Trump’s strong endorsement of crypto, including proposals to use Bitcoin for debt reduction and calls to remove the SEC Chairman, is in sharp contrast with the perceived lack of support from VP Kamala Harris and the current administration.

Besides Hoskinson, Galaxy Digital’s Head of Research, Alex Thorn, also has warned that Harris’s choice of advisors. Many of them reportedly have anti-crypto views and this could lead to further regulatory challenges.

Crypto scams uncovered

  • India’s Enforcement Directorate (ED) conducted raids across the country and seized INR 1 crore tied to a cryptocurrency scam. This scheme was led by Naresh Gulia who lured investors into investing in Emollient Coin. He falsely promised to double their investments in 10 months.

  • United States’ SEC charged Novatech Ltd. and its founders with a $650 million cryptocurrency fraud, while deceiving over 200,000 investors. The company ran a pyramid scheme targeting the American-Haitian community, diverting promised crypto and forex investments for personal gains.

  • The ETH Trust Fund DAO executed a $2 million rug pull, diverting funds to a new wallet and laundering them through Tornado Cash and Railgun. The project, which falsely claimed to be an OMH fork, went offline and deleted its social media after the theft.

Top 3 coins of the day

Worldcoin (WLD)

Key points:

  • WLD's bullish momentum strengthened after a period of bearish dominance.

  • It saw double-digit gains over the last 7 days.

What you should know - After recently hitting an 11-month low, Worldcoin (WLD) saw a notable rebound, rising by 3.98% over the past 24 hours. At the time of writing, WLD was trading at $1.72 with a market cap surpassing $6.3 million. The daily and weekly charts also showed positive trends, with the weekly hike exceeding 14% - A sign of robust bullish momentum.

Despite this, the Relative Strength Index (RSI) remained in the bearish zone despite some signs of recovery. Should WLD break through the $1.80 resistance level, the RSI's upward movement could potentially overcome existing selling pressure, signaling a stronger bullish shift.

Aave (AAVE)

Key points:

  • AAVE’s price dipped, but the bull charge persisted.

  • Dip may have been due to a pullback from the overbought zone.

What you should know - Aave (AAVE) recently saw significant whale activity, with significant purchases reported since 20 August. Notably, one whale acquired $10.4 million worth of AAVE in less than a day, signaling strong accumulation. This led to a hike in the altcoin’s price, though it did fall soon after.

Despite this, AAVE's weekly charts revealed gains of over 20%, with the press time trading price at $132.99. On the technical front, the Relative Strength Index (RSI) was in the bullish zone and the Chaikin Money Flow (CMF) indicator had a reading of 0.16 - A sign of ongoing positive sentiment.

Polygon (MATIC)

Key points:

  • MATIC was trading in the green on the daily and weekly charts.

  • The RSI indicated strong bullish sentiment, with figures of 64.

What you should know - While other tokens mirrored the broader bearish market trend, Polygon (MATIC) appreciated by 1.77% in 24 hours. The weekly chart showed a strong bullish trend, with MATIC up more than 30%. If this trend continues, MATIC might break above its $0.546 resistance level.

Technical indicators like the MACD suggested sustained buying interest. However, if MATIC drops below the $0.500 support level, it could signal a potential decline. Otherwise, continued bullish movement may drive MATIC for a bull run.

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