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Wednesday's market price action has been impressive to watch. That's a blanket statement for investors across nearly every asset class, with most major indexes and markets seeing a recovery rally after a rather dismal Tuesday amid rising geopolitical tensions at levels not seen in a very long time.
As a major barometer of investor sentiment and broader uncertainty, Dogecoin (DOGE +15.37%) is one of the best-performing cryptocurrencies in today's market. Surging 15.7% over the past 24 hours (as of 2:15 p.m. ET), this top-tier meme token is signaling investors are jumping back aboard the momentum train.
Today's Change
(15.37%) $0.01
Current Price
$0.10
Let's dive into whether today's move in Dogecoin is sustainable, and whether this top meme token can continue to hold the $0.10 level.
Dogecoin's incredible move today is one for the ages
Source: Getty Images.
Indeed, today's price action in Dogecoin is reminiscent of many of the moves this meme token made immediately following the onset of the pandemic. At that point, investors were going absolutely risk-on, seeking the highest-momentum assets with the most upside to beat the market, even though most assets seemed poised to keep heading higher.
Of course, the situation has shifted starkly in recent months, with recent U.S. interventions globally sparking concern that higher spending (leading to higher inflation), potential oil-related issues (also driving similar concerns), and skyrocketing uncertainty could lead to a continued sell-off in any asset viewed as highly speculative or a measure of risk and uncertainty. Dogecoin certainly fits that bill, in my view.
Now, some underlying fundamental drivers are moving the needle for Dogecoin today. Strong trading volume (up more than two-thirds over the past day and triple the market's 25% increase) and a valuation that can certainly be viewed as "cheap" appear to be key drivers of today's move. Indeed, with Dogecoin still down more than 80% from its peak, there's plenty of upside for those who think this bull-market rally can be revived.
I think it's far too soon to tell whether that will turn out to be the case. But for today at least, investors are looking past the negative headlines toward some inkling of positive price action ahead. In such an environment, it's not uncommon to see these kinds of moves in Dogecoin, so this is one token to definitely keep an eye on here.
Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.