In September, the largest meme coin Dogecoin surged by more than 12% in the spot market.
On the exchange MEXC this week, the coin reached $0.242 – the highest level on the trading platform since mid-August.
At the same time, there is a rapid growth in interest in the asset in the futures market. Traders expect the launch of a spot crypto ETF in the US that will track the performance of DOGE.
In social media, the overwhelming majority of users expect the appearance of such an instrument in the very near future.
Meme coin holds in the top 10 digital currencies and remains one of the most attractive assets for both retail and institutional investors, as well as for speculators looking for quick profits.
1. Has DOGE approached a local peak?
At the end of July, Dogecoin started to retreat after reaching $0.287 on MEXC. This level on the exchange became a local peak for the meme coin, while it touched a bottom in early August at $0.189.
At the same moment, the Relative Strength Index (RSI) fell into the oversold zone. Usually, its decline creates conditions for the return of traders buying the asset at comfortable prices. As a result, in August, DOGE resumed its expansion after a brief consolidation.
In September, the trigger for a new rally was the preparation for the launch of a spot ETF on Dogecoin. In almost two weeks, its value increased by more than 12%.
But at the same time, overheating risks emerged. Due to the activation of bulls, the RSI quickly entered the overbought zone. The growth of DOGE slowed down and we are likely facing a price correction.
Aggression is also observed in the futures market, posing a threat of significant position liquidation. According to Coinalyze, the open interest in Dogecoin futures recently exceeded $2.1 billion – the highest level since July.
The funding rate for perpetual swaps on MEXC has surged, indicating a dominance of bullish sentiment. However, expectations surrounding the ETF launch may be overstated, and in this situation, cryptocurrency drawdowns cannot be ruled out.
Experts agree that support at the $0.20 level should hold in the event of a sharp increase in pressure.
2. Social media is preparing for the launch of the Dogecoin ETF.
According to Bloomberg strategists, a spot Dogecoin ETF is expected to debut in the U.S. this week.
As noted by one of the analysts, Eric Balchunas, a regulated instrument will emerge in the U.S. market under the Investment Company Act of 1940.
This is its main distinction from all other crypto funds that have been registered under the U.S. Securities Act of 1933.
The instrument focused on the spot performance of the meme coin is called the Rex-Osprey DOGE ETF.
It will be available to investors under the ticker DOJE. Traders will have the opportunity to enter the crypto space directly without holding the coin itself. This will be the first Dogecoin ETF on the American stock market.
The launch of crypto funds is awaited by both retail investors, who have been testing the digital currency market for many years, and institutional investors, who are just beginning to look into this new asset class. Social media users estimate the likelihood of such an instrument being approved at 93%.
Meme coins are gaining amid positivity among traders. A similar situation was observed in the periods leading up to the launch of spot crypto funds for Bitcoin and Ethereum. Santiment reminds us.
Bullish sentiment may dominate for another 1-2 days after the launch of the DOGE ETF, but after that, we can expect profit-taking, primarily involving large investors or whales. They buy when the coin drops and start selling when its value increases.
This is exactly the scenario we observed at the end of August when, as a result of the DOGE retreat, investments in crypto grew for addresses holding between 1 million to 10 million coins. Aggressive accumulation began at the moment when forecasts about the imminent launch of a crypto ETF appeared in expert circles and on social media.
Currently, 10.91 billion DOGE is under the control of whale wallets, which accounts for 7.23% of the digital currency’s circulation. Large investors’ reserves have reached their highest level since 2021.
Dogecoin is available to users on the MEXC exchange in real time. Users can also test the capabilities of other cryptocurrencies.
Telegram, Reddit, X, and 4Chat users do not rule out the emergence of crypto ETFs focused on other meme coins in the American market.
The launch of the Dogecoin ETF will create conditions for the popularization of meme projects on Wall Street.
3. The launch of the ETF for DOGE may accelerate the expansion of the meme coin market.
The market capitalization of meme coins is $72.51 billion, having exceeded $124 billion in December last year. The trigger for such a surge was Donald Trump’s victory in the presidential election, who promised to legalize the cryptocurrency industry.
The lion’s share of the capital has been accumulated by leading meme cryptocurrencies Dogecoin and Shiba Inu, with their total market caps estimated at $36.349 billion and $7.610 billion, respectively.
The number of tokens has significantly increased over the past two years, yet the practical value of such cryptocurrencies is still questioned by many experts. However, retail investors and even institutions continue to increase their investments in such assets.
Ultimately, the growth of investments in meme coins contributes to the expansion of the global blockchain infrastructure.
The launch of the spot crypto fund ETH for Dogecoin will become a new stage for the entry of large capital into meme cryptocurrencies. If the launch of the instrument on the American stock market proves successful, the number of applications for the issuance of ETFs focused on meme coins will increase, experts believe.
At the same time, the activity of traders acquiring tokens at the earliest stages of projects with a humorous theme will intensify. For example, recently, following the market entry of Maxi Doge (MAXI), the token’s turnover exceeded $2 million.
Investors try to acquire the coin almost immediately after its launch, as they believe that in the long run, this digital currency will become interesting to major market participants. Therefore, it can be profitably resold.
For example Dogecoin demonstrates how, in just two years, investments in crypto from short-term traders have significantly increased.
While in 2022-2023, the lion’s share of DOGE was held by long-term investors, by 2024 the trend changed and traders interested in quick profit began to show interest in the asset.
Disclaimer: This information is not investment advice, tax advice, legal, financial, accounting, consulting, or any other related services, nor is it advice to buy, sell, or hold any assets. MEXC Education provides information solely for reference purposes and is not investment advice. Please ensure that you fully understand all risks and exercise caution when investing. The platform is not responsible for users’ investment decisions.
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