Dogecoin hits 2023 low - Bitcoin spurs DOGE price rally

Significant drop in social volume could imply a potential buying opportunity for Dogecoin as weighted sentiment hits a new low.

The recent significant drop in social volume surrounding Dogecoin [DOGE] could potentially signal a buying opportunity for investors. According to analysis conducted by AMBCrypto using data from Santiment, the Weighted Sentiment for DOGE recently hit -1.562, the lowest it has been since September 2023.

Weighted Sentiment is a measure of the average comments about an asset on social media. The decrease in social volume could indicate a shift in sentiment towards the memecoin, with more negative comments being made compared to positive ones.

Despite the negative sentiment, history has shown that Dogecoin has a tendency to defy market expectations. In September 2023, when the sentiment was similar to the current levels, DOGE's price actually saw a significant increase from $0.064 to $0.097 in less than three months. This phenomenon, known as a "hated rally," occurs when pessimism surrounding a cryptocurrency leads to a price surge.

Based on historical patterns, there is a possibility that DOGE's price could reach a yearly high of $0.27 in the near future. At the time of writing, the memecoin was valued at $0.16, with 84% of all DOGE holders currently in profit at this price level.

If DOGE's price continues to rise as predicted, it is estimated that an additional 1.2 billion coins could become profitable. To see all of the total supply in gains, the price of the memecoin would need to reach $0.32, the average price of addresses holding DOGE.

It is important to note the correlation between Dogecoin and Bitcoin, with a correlation coefficient of 0.86 at the time of writing. This indicates that DOGE tends to move more closely with Bitcoin than with other cryptocurrencies. Therefore, any significant movement in Bitcoin's price could also impact DOGE's price.

In addition to the price analysis, the social volume surrounding DOGE has also decreased significantly, from 614 to 120. This decline in social volume could suggest a decrease in demand for the memecoin, but it could also present a buying opportunity for investors who believe in its long-term potential.

Overall, while the current sentiment surrounding Dogecoin may be negative, there are historical precedents that suggest a potential price increase in the near future. Investors should consider the various factors at play, including the correlation with Bitcoin and the overall market sentiment, before making any investment decisions.