The Rise of the Underdog: Dogecoin surges +25%

1) Dogecoin rallied recently as speculation increased that the meme coin could be used as a payment mechanism for the rebranded Twitter platform. DOGE is still -88% from its all-time high and peaked out when Elon Musk appeared on the Saturday Night Life show (SNL) on May 8 2021.

2) DOGE had a peak market cap of $88bn.

3) His SNL performance flopped and DOGE went crashing down. But as crypto is entering the summer lull that we initially expected for August, DOGE might be the summer’s highflyer as other crypto themes are taking a backseat. Musk is on a marketing tour in re-inventing Twitter.

4) While Korean traders have been active in Ripple’s XRP in the aftermath of the lawsuit verdict, those traders are increasingly trading DOGE as the meme coin had the largest volume there on Monday and the second highest on Tuesday.

5) Bitcoin has failed to reach our summer target of $35,000 and there is now the risk that Bitcoin will re-test its 200-day moving average. Frequently Bitcoin retests its 200-day moving average in bear markets (March 2022) as well as in bull markets (March 2023).

6) Therefore, Bitcoin could decline another -8% from current levels ($29,200) and retest the 200-day moving average ($26,400). This level might coincide with the seasonal decline in September, the weakest and only negative month based on 10 years of historical analysis. Bitcoin has declined, on average, by -4% in September, with the last six September experiencing negative returns.

7) Bitcoin saw three major rallies in 2023, notably in January and March, when prices rose +46% in each month and +26% in June.

8) Despite plenty of catalysts, the June rally failed to lift prices higher. On June 15 Blackrock applied for a US-listed Bitcoin ETF and on July 13, Ripple Labs (XRP) landed a landmark win in the SEC case.

9) But the SEC might not give in so quickly and there have been confusing statements around the Ripple case. Despite the XRP token jumping from $0.45 to $0.85, prices have retraced and are barely above the $0.70 support level. Short-term traders should consider cutting positions if the $0.70 is broken.

10) Brave traders could consider buying DOGE and shorting XRP against it.

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