Dogecoin is among the top tokens offering an edge to crypto investors today.
Investors are seeing high volatility today ahead of tomorrow’s presidential election. This certainly makes sense, with risk-aversion sentiment hitting most stocks and higher-growth assets hard today, cryptocurrencies have generally followed suit, falling 0.5% over the past few years. last 24 hours at 1:30 p.m. ET.
However, Dogecoin (DOGE 14.27%) is among the top large-cap tokens currently in supply today, with this top meme token surging 7.3% over the same period. It’s a remarkable decision that’s worth exploring.
Here are the key factors investors may want to watch when it comes to this top meme token and what’s currently attracting buying interest.
A fundamental change at the origin of part of this movement
One of the key factors that I closely monitor when it comes to major tokens like Dogecoin are momentum-related factors such as liquidation data. Coinglass is a great resource for this information, which is particularly useful for projects like Dogecoin that see price action tied to more nebulous factors like momentum and hype than other projects.
Over the past day, liquidation activity (which derivative contracts – long or short – are liquidated or closed) has changed. On November 2, most closed Dogecoin derivative contracts were long, indicating bearish momentum. Margin turned positive yesterday, with approximately $1 million more short contracts liquidated than long contracts. This trend appears to be continuing today, and we will see updated data soon, which I hope reflects this trend.
The other key metric I look at when it comes to Dogecoin is Total Value Locked (TVL). Dogecoin’s TVL increased from $4.01 million a month ago to $4.91 million yesterday. This 22.4% increase roughly matches Dogecoin’s overall price performance, and it makes sense. TVL measures the overall activity observed on a particular blockchain, so it is clear that users are flocking to Dogecoin to use its various applications and trade the token. Although the token’s TVL has fallen in recent days, any sort of continued upward momentum to this extent should bode well for speculators and those betting on this move continuing.
Can this momentum continue?
As is always the case, I end up thinking about how these short-term developments might portend a longer-term situation. When it comes to more speculative coin projects like Dogecoin, aside from technical analysis and reading tea leaves (investing strategies I don’t believe in), looking at data is really everything what fundamental investors can do. In this regard, things currently seem to be going in the right direction for Dogecoin bulls.
We will have to see if Dogecoin can continue to see TVL accumulation and positive derivatives liquidation activity progress. But I think there are certainly fundamental reasons why investors are increasingly bullish on this particular project, and it’s a project that I’m going to continue to keep on the radar at this time.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.
