Key Insights:
Dogecoin sees a bullish reversal ahead as whales acquire 1.7 billion DOGE.
Whales could be acquiring Dogecoin due to its ETF, which is expected to receive approval very soon.
The top memecoin dropped from $0.22 last week to $0.17 this Monday due to bearish sentiments in the markets.
Bearish factors like disappointment after the US Crypto Reserve order and lack of interest rate cuts have hit the markets hard in recent times.
Dogecoin Drops 20% in Last 7 Days
CoinMarketCap
In the last 7 days, Dogecoin has dropped more than 20%. The crypto fell from $0.22 the previous Monday to $0.17 today. This week's drop is a part of a larger downtrend in Dogecoin and several other memecoins that have seen sharp corrections.
The fall in prices is attributed to two major reasons, which are the lack of active Bitcoin buying in the US crypto reserves and the low holding rate in the active ETFs.
Opposite to prior expectations, the US Bitcoin Reserve will not likely buy any Bitcoin, altcoin, or memecoin at least in the near future. The reserve will just hold the ones that are already in the custody of the US Government.
This diminished the market hopes of liquidity injections because after the prediction of a hawkish year from the US Fed, crypto markets have no other source of liquidity.
The second reason for a fall in Dogecoin below the $0.2 support zone is that the Dogecoin ETF, if approved, could meet the same fate as Ethereum ETFs. A recent study on Bitcoin ETF holding rates shows that they are currently suffering from less than 50% holding rates, indicating more than half of ETF subscribers at most times were indeed speculators.
SEC de-regulated memecoins last week with a Press Statements saying that these cryptocurrencies lacked any utility and could not be termed as securities. The agency further added that Dogecoin and all other memecoins were indeed collectibles, something that is similar to baseball cards.
The move has nearly de-regulated memecoin markets, giving them the full liberty that all other major assets lack. This news could have initiated a multi-legged rally had there been sufficient liquidity in the markets. However, given the double whammy of ETF underperformance and lack of liquidity, the markets are getting more bearish.
However, in the future, if there is further support from better regulations, the crypto markets could show a decent rally. This regulatory support is expected around mid-2025 when the White house AI and Crypto Working Group is expected to table its suggestions to the US President.
Unlike most memecoins, Dogecoin has its own blockchain. Further, technologically, it is very close to Bitcoin and Litecoin's architecture, all working on a robust Proof-of-Work consensus mechanism.
If the Dogecoin blockchain is developed further, it could act as a simple, efficient, and secure way of sending cross-border transactions.
No other memecoin blockchain is as independent as Dogecoin. Even the Shiba Inu blockchain, Shibarium, relies on the Ethereum Virtual Machine, ERC token standards, and ecosystem support from Ethereum to run. Rest all memecoins either exist on Solana, Ethereum, or Base, with little to no utility.
Whales have been recently spotted accumulating 1.7 billion DOGE worth $289 million in the last 72 hours before press time. This accumulation has one of the highest volumes among those done by DOGE whales.
The accumulation could have been caused by an impending Dogecoin ETF approval by the US SEC. Bitwise has an active DOGE ETF application at present and could be the first Dogecoin ETF.
The approval chances are boosted by the fact that being a de-regulated crypto by the SEC, Dogecoin sees little hurdle ahead.
Other altcoin ETFs that are scheduled for approval are XRP ETFs, Solana ETFs, a multi-token ETF, and a few minor ones.
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