The price of Dogecoin (DOGE) has rallied by more than 123% this week, hitting new all-time highs of $0.13 on strong technical momentum.
DOGE/USDT 4-hour price chart (Binance). Source: TradingView.com
It has been competing against Chainlink (LINK) for the top-ten spot with both cryptocurrencies hovering at around $17 billion in market capitalization.
There are three major reasons why DOGE saw a steep climb over the past seven days. These include Elon Musk's tweets, the resurgence of altcoins, and the positive sentiment around crypto in general.
Altcoin market rallies strongly with positive sentiment
XRP, for example, broke above $1.5 for the first time in over three years, showing that profits from Bitcoin and Ethereum (ETH) are possibly cycling into altcoins in the short term.
Kelvin Koh, a partner at Spartan Group, one of the largest DeFi-focused funds in Asia, explained that this trend happens periodically because quant funds trade the convergence between Bitcoin and altcoins
"The reason this happens periodically is because there are a bunch of quant funds out there that play the convergence trade between $BTC and a handful of liquid alts. Whenever there alts look cheap relative to $BTC, they pile in. When they look expensive, they rotate back to $BTC. No fundamentals involved so dont try too hard to rationalize the moves. This strategy has proven effective over time and there are enough managers playing this that it becomes self-fulfilling and keep recurring."
The general increase in the momentum of the altcoin market played a major role in fueling Dogecoin's overall momentum throughout the past few days.
Technical traders have echoed a similar se ...
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