Dogecoin’s recent social media hype has few lessons for potential traders

According to LunarCrush’s new report published on 24 September, Dogecoin has been showing extreme growth in its social media department.

This new spike in social media growth could have been sparked by Ethereum founder Vitalik Buterin’s comments that he made with regard to Proof of Work blockchains.

Word on the street

During a recent event hosted by Messari on 21 September, called the Mainnet, Vitalik Buterin was asked whether all networks should move to POS. In response, he stated that he hopes that Dogecoin and Zcash, both move to PoS soon.

Dogecoin currently is the second largest POW chain in the world. And, there haven’t been any new updates from the Dogecoin Foundation about a plan to switch.

If Dogecoin does plan to make a switch, the move will alienate a lot of miners who are profiting off of mining DOGE.

As can be seen from the image below, DOGE’s hashrate has been increasing steadily over the past month. Ergo, implying that the number of miners has been increasing on the Dogecoin network. This goes on to show that the strength of the network has been on a northward journey.

Source: Messari

Even though Vitalik’s comments may not be able to nudge the team at Dogecoin to move in the POS direction, it could be one of the reasons why DOGE has been seeing an immense surge in the social media space.

According to Lunar Crush, Dogecoin hit AlternativeRank of one out of the top 3,899 coins across the market.

Well, AlternativeRank is calculated by observing the coin’s price, volume, social media volume, and social score. 

Source: LunarCrush

Even though there are a lot of positive factors in favor of the coin, there are some metrics that readers should keep in mind before entering a trade.

DOGE’s velocity has been on a decline over the past month. Thus, implying that the memecoin hasn’t been changing wallets frequently. There has been a slight dip in the meme coin’s market cap as well. This could be a grim-looking scenario for potential investors.

Source: Santiment

That being said, there has been a drop in the reading of DOGE’s development activity. Indeed, a surprise for the long-term investors who are patiently waiting for a price hike.

Interestingly, the Dogecoin team has launched a hackathon  to incentivize developers to build on their platform. The team is also providing grants so that the developers can be motivated to go to the hackathon.

But DOGE on 25 September, at press time, was trading at $0.0628 with a price decline of 5.10% in the last 24 hours.

It remains to be seen whether DOGE’s newfound hype will be enough to support the meme coin’s growth. Even though there are a lot of metrics supporting the crypto’s growth, readers should proceed with caution as meme coins can be subject to a lot of volatility.