On June 24, crypto analyst Kriss Pax released a video on YouTube discussing the current state of Dogecoin amidst a downturn in the crypto market, driven primarily by Bitcoin. The video delves into the reasons behind the market slump and explores the potential for a significant rebound in Dogecoin’s price.
Current Crypto Market Overview
Pax begins by addressing the overall decline in the crypto market, with Dogecoin being dragged down by Bitcoin’s downturn. He emphasizes that Bitcoin’s influence is pivotal, as its price movement impacts the entire market, including Dogecoin. Pax highlights that Dogecoin has dropped to around 11.4 cents, unable to maintain the 12-cent mark.
Factors Influencing Bitcoin and the Rest of the Crypto Market
One of the critical factors contributing to Bitcoin’s decline is the impending repayment of 140,000 Bitcoins from the Mt. Gox exchange hack, scheduled for July. Pax explains that this looming event has instilled fear among investors, fearing a massive sell-off once the repayments are made. Additionally, Bitcoin mining profitability issues and the resulting sell-off by miners to cover energy costs have further exacerbated the situation.
Impact on Dogecoin
Despite the market-wide decline, Pax notes that Dogecoin holders are demonstrating resilience, with many continuing to hold their positions. He points out that the market’s broader digital currency ecosystem is under pressure, leading to significant liquidations of leveraged positions. For Dogecoin, $4 million in long leverage positions were liquidated recently.
Signs of Potential Recovery
Pax remains optimistic about Dogecoin’s future, suggesting that the current downturn might represent a bottoming out, providing a buying opportunity. He refers to the Relative Strength Index (RSI), indicating that Dogecoin is ready for a potential rebound. The market’s history of altcoin dominance following Bitcoin downturns supports his positive outlook.
Analyzing the broader market dynamics, Pax discusses the altcoin dominance, which typically rises when Bitcoin dominance falls. He points to historical patterns from 2020 and suggests that a similar altcoin bull run could be on the horizon. Pax believes that Ethereum (ETH) will likely lead the next market rally, followed by altcoins like Dogecoin.
On-Chain Indicators
Pax highlights an on-chain buy signal for Dogecoin, indicating it is currently undervalued. He refers to the Market Value to Realized Value (MVRV) ratio, which supports the idea that Dogecoin presents a strong buying opportunity at its current price levels.
Long-Term Outlook
Drawing on historical data and patterns, Pax remains bullish on Dogecoin’s long-term prospects. He references previous market cycles from 2016 and 2020, which saw significant rallies following similar signals. While acknowledging that predicting exact future prices is challenging, he suggests that Dogecoin could experience substantial gains if the market dynamics play out as expected.
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