Dogecoin recently hit its ATH after a meteoric rise
At the time of this writing, Dogecoin’s price had dropped 12% in the past 24 hours. Although DOGE has not fallen because of them, it is important to note that in the past few days we have also seen the launch of several impersonating projects in other ecosystems, such as Binance Smart Chain and YFI. To take note, DOGE still works as a Proof-of-Work (PoW).
The Shiba Inu coin, another imitator project that was launched recently, is being hailed as a “Dogecoin killer”, especially because of its 1900% return offer in a week. WOOFY at YFI, for example, took altcoin to its ATH above $ 88,000.
In addition, the YFI rally alongside other prominent DeFi projects initiated the DeFi Summer Round 2, and DOGE’s impersonating projects are the driving force behind this rally, among other important factors.
DOGE social volume vs price || Source: Lunarcrush
The social volume for DOGE increased after a drop since the peak on May 9, 2021. The increase in social volume is a key factor in launching similar projects. After DOGE’s price hikes and the launch of similar projects, altcoins are likely to recover from the current price drop.
Among similar projects, SHIB has a high social volume and has dominated Crypto-Twitter recently. After a drop of almost 30% in the price, the SHIB price is expected to recover from the drop with an additional increase in social volume and inflows.
Currently, the “dogs” or meme coins available on exchanges include KISHU, SAMO, BSHIBA, KEANU and ASS. These projects are almost sufficient for a virtual zoo portfolio that offers a high short-term ROI. Social volume, sentiment on the network and trade volume are the main factors driving the rise in prices.
In addition, short-term ROI is currently the biggest driver of the meme currency frenzy. Another factor that had an impact is its high market capitalization and its recent AHTs. Along with the recovery of DeFi projects, retail traders are likely to withdraw from meme currencies after realizing short-term gains.
Short-term ROI DOGE || Source: Messari
The main question here is – will these projects survive 90 days, 6 months or a year? Is the current rise in prices the end of meme currencies as we know them? For the rise of meme currencies to spread, consistent demand across exchanges, increased trading volume and consistently high short-term ROIs are essential. Although the price has plummeted for most altcoins, the recovery will likely remain, especially since 87% of DOGE HODLers are currently profitable.
The currently profitable HODLers are expected to continue HODLing, supporting bullish sentiment and resisting selling pressure. In any case, DOGE’s copycat projects and the expectation of high short-term ROIs are likely to drive this upturn.