Snoop Dogg and Gene Simmons join Elon’s Musk’s ‘Dogecoin army’

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Rapper Snoop Dogg and Kiss’ Gene Simmons have been each expressing their assist for the “Doge Military” over the weekend alongside Tesla CEO Elon Musk. Because of this, the cryptocurrency’s worth has rallied once again by 27% on Feb. 7. DOGE is the native cryptocurrency of Dogecoin, which has grow to be a family identify in latest months.

Following the Gamestop and Robinhood saga, many traders rushed into the cryptocurrency market. DOGE was the primary cryptocurrency that noticed retail worry of lacking out (FOMO), particularly among the many r/Wallstreetbets group members.

“Yup. I purchased much more Dogecoin,” Simmons wrote on Feb. 6, persevering with: 

Why? As a result of I consider it’ll go up. However that’s simply me,” 

DOGE/USDT 1-day candle worth chart (Binance). Supply: TradingView.com

Merchants sign warning towards the DOGE rally

DOGE is often thought of a meme cryptocurrency inside the crypto market that started off as a joke. It doesn’t have a use case, nevertheless it has an lively group round it.

Therefore, when DOGE begins to rally as a consequence of an sudden catalyst, like Elon Musk’s DOGE meme or a r/Wallstreetbets-fueled pump, it typically sees an explosive uptrend in a brief interval.

Nevertheless, merchants are urging warning in coping with Dogecoin. Donalt, a preferred and pseudonymous cryptocurrency dealer, mentioned the quantity of “normie shilling” round DOGE is unprecedented.

The dealer emphasised that DOGE for the long run shouldn’t be a positive commerce, and it’ll ultimately come down, so merchants must method it with warning. He wrote:

“The present DOGE scenario is sort of humorous. Do not suppose we have seen this quantity of normie shilling on this area earlier than and it is for our beloved foolish DOGE coin of all issues. Each different day one other celeb comes out speaking about DOGE. I see zero cause to counter commerce that. That mentioned should you’re making an attempt to get into DOGE for the long run – You will give again every part you have made. So, promote partials on the way in which up or attempt to time the highest by analyzing how a lot steam is left within the normie shill tank. Shopping for DOGE ought to solely be achieved with promoting in thoughts.”

When the r/Wallstreetbets rally occurred on Jan. 29, the buying and selling quantity of DOGE briefly surpassed Bitcoin on Binance. Which means there may be at the moment a variety of hype in the mean time, which additionally suggests {that a} pullback mustn’t come as a shock. 

There’s a distinction between DOGE now and earlier than

Throughout the Jan. 29 DOGE worth rally, the futures funding charge was extremely destructive. On common, the funding charge of a cryptocurrency hovers at round 0.01%.

On the time, the futures funding charge of DOGE was hovering at round -0.1%. This meant that it was 10 instances decrease than common throughout that interval.

The futures funding charge is a mechanism that incentivizes consumers or sellers based mostly on market steadiness. If there are extra consumers available in the market, then sellers need to pay consumers a charge each eight hours.

If the funding charge is destructive, it means sellers are paying consumers, and if the speed is optimistic, consumers are paying sellers.

At the moment, the funding charge of DOGE Is considerably above common at round 0.1%. This makes a protracted squeeze probably, which might trigger a short-term drop if cascading liquidations happen.