The long-awaited cryptocurrency market rally is finally here, although purely speculative and most likely short-term. Some positivity is a sign of a stronger recovery to come.
Dogecoin’s surprising growth
Rumors are solid fuel, especially for the cryptocurrency market and related projects. Thanks to the rumors, DOGE was able to generate triple-digit returns for its early investors. In this case, the rumors and conjectures about the implementation of Dogecoin resurfaced on Twitter. In the minds of retail investors, the result is another increase in the price of the biggest memecoin on the market.
Typically, DOGE market cycles consisted of a short-term, explosive bombshell, a rapid 10-20% reversal, and a gradual pullback to pre-bomb levels. However, the meme coin deviated from the above market growth scheme, and the recent price action in the market has proved this point. In the past eight days, DOGE gained 40% but has lost more than 50% since hitting the local high in early November. Such behavior in the market is highly unusual, so it becomes extremely difficult to make predictions.
A bullish cross is expected between the 50-day and 200-day moving averages in the coming days. The signal could become the catalyst for accelerating the rally. However, DOGE’s main problem is a high percentage of speculation. Traders rely on the above rumors and fake news.
In addition to Bitcoin’s surge to $17,000, Ethereum was just a little behind digital gold and attempted to approach the $1,300 price level. Unfortunately, the initial momentum wasn’t enough to break the key price level, and Ether has since bounced back to $1,250.
However, the surge above the 21-day moving average is the first sign of an imminent trend reversal that ETH badly needs. Due to the lack of activity on the network, Ether’s price has been crashing for almost months now. Recently, today we covered how Ethereum’s burning mechanism barely delivers a burned volume. Although Ether became a deflationary asset in early November, Ether’s net issuance returned to surplus after transaction activity on the network hit a multi-month low.
With the lack of network usage, Ethereum will most likely remain inflationary despite the change in consensus mechanism and a significant drop in issuance. However, historical data suggests that low network activity is temporary, and the deflation mechanism is starting to work again, even without the help of performance-hungry applications. At press time, Ethereum is trading at the $1,267 price level and attempting to reach the key psychological resistance level at $-$1,300. A successful break would allow a run to the 50-day moving average, the first hurdle before a recovery run.