Why Dogecoin Price Outpaced Bitcoin In Latest Crypto Rally?

Dogecoin’s recent 50% hike in five trading days has gained attention across the crypto market. Experts are attributing such a useful trend to certain benefits for the market.

Michael Regan, Bloomberg’s head of crypto coverage, cited low transaction fees as one of the many reasons why Dogecoin outperformed Bitcoin in its recent rally.

Due to its relatively low fees for transactions, Dogecoin has found its place among those who use cryptocurrencies for cross-border payments. Especially in areas of the world experiencing economic difficulties.

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For instance, Regan narrated how Venezuelans in other countries have been able to use DOGE for remitting money back home at minimal charges.

Apart from individual users, the number of firms that have adopted the payment options through Dogecoins has also grown.

Some companies such as the Williamsburg Pizza in New York accept the token arguing that DOGE has the capacity to meet all these and more transactional qualities.

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Experts have asserted that this could be the reason that may see more entities adopting Dogecoin as a payment platform due to low charges on transactions.

Elon Musk’s Influence and the D.O.G.E. Factor

This rise was also due to another pump from Elon Musk. He has been a supporter of Dogecoin for years.

More recently, Musk has put forward an idea for a “Department of Government Efficiency (D.O.G.E.)” to be formed under the presidency of the President-elect Donald Trump.

It attracted the attention of Dogecoin investors. The agency, while targeted at cutting government spending, brought hope to the Dogecoin community.

Many hope that due to Elon Musk and Trump’s support, Dogecoin may gain more attention. It may even be incorporated into some businesses.

Other endorsements from Musk in the past have led to upward price moves of Dogecoin. The recent actions affirm this trend.

Others view his support as the key to the future success of Dogecoin. Many investors believe Musk can bring investors and money to the token.

Dogecoin High Volatility Outpaces Bitcoin’s Gains

Besides utility and outside pressure, the high volatility benefited Dogecoin, where, in percentage terms, DOGE has grown much faster than BTC.

While other tokens exhibit bullish trends in the crypto market, DOGE has had higher fluctuations in its prices relative to Bitcoin.

Regan also pointed out that this volatility factor is similar to the concept of high-beta stocks, often outperforming overall market returns in a bullish market.

A 200% growth in monthly value has been recorded in DOGE price. It went from $0.1105 at the start of the latest crypto rally until its peak at $0.4359.

This rapid growth also increased Dogecoin market capitalization to $ 62.96 Billion. It surpassed assets such as XRP and USD Coin.

Experts feel that the largely volatile nature of Dogecoin works both to its advantage and disadvantage, by providing higher returns in a bullish market.

Potential for Dogecoin to Reach Higher Price Channels

Many analysts such as Ali Martinez believe that Dogecoin price might surge even higher. It is possible that the price could surge to $18 as determined by some technical analysts.

Martinez explained that at the moment, Dogecoin is within an up-trending price channel. Each up move is challenging new resistance levels.

Should the token breach its middle boundary, it may rise to as much as $2.40. If it is to test the upper boundary, a price target of $18 is possible, which is considerably higher than the current prices.

Martinez uses the historical price data and Fibonacci retracement levels that point towards an opportunity of a parabolic move up if the Dogecoin continues with its uptrend.

Such patterns were witnessed in the previous cycles for Dogecoin where closing above long-term resistances resulted in even as high as 8,933% gains between 2017 and 2018 and 15,534% gains between 2020 and 2021.