Investors are experiencing significant volatility as they approach tomorrow’s presidential election, a situation that has led to a risk-off sentiment affecting most stocks and higher-growth assets. As of 1:30 p.m. ET, cryptocurrencies have generally followed this trend, with an overall decline of 0.5% in the past 24 hours. However, Dogecoin (CRYPTO: DOGE) stands out among large-cap tokens, surging 7.3% during the same period, prompting interest in the reasons behind this notable rise.
Key Factors Driving Dogecoin’s Surge
One of the crucial elements influencing Dogecoin’s performance is momentum-driven factors, particularly liquidation data. Coinglass provides insights into this information, which is especially relevant for tokens like Dogecoin, where price movements are often linked to speculative momentum and hype.
Recent data reveals a shift in liquidation activity for Dogecoin derivatives contracts. On November 2, most of the closed contracts were long positions, indicating bearish momentum. This trend reversed yesterday, with approximately $1 million more short contracts being liquidated than long positions. This positive trend appears to be continuing today, suggesting a growing bullish sentiment among traders.
Another important metric to consider is Dogecoin’s total value locked (TVL). This figure rose from $4.01 million a month ago to $4.91 million as of yesterday, marking a 22.4% increase that correlates with Dogecoin’s price performance. TVL measures the overall activity on a blockchain, indicating increased user engagement with Dogecoin’s applications and trading activities. Although the TVL has dipped slightly in recent days, ongoing growth in this metric would likely benefit speculators and those anticipating further price increases.
As with any speculative asset, it is essential to consider whether current momentum can continue. For projects like Dogecoin, fundamental analysis provides the best insights amid short-term price fluctuations. Currently, data suggests a positive outlook for Dogecoin bulls, but future developments in TVL and derivative liquidations will be key indicators to monitor.
Investors are advised to keep an eye on these metrics to assess whether Dogecoin can maintain its upward trajectory. With growing interest in this meme token, it remains a noteworthy asset to watch in the evolving cryptocurrency landscape.
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