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Why Is Dogecoin Skyrocketing But Bitcoin, Ethereum Are Tanking?

Bitcoin (BTC) has sunk $7,066 from its Friday highs — about 11% over the weekend — and traded significantly below the $60,000 levels at press time late Sunday. Meanwhile, Dogecoin (DOGE) and several other cryptos are continuing to shoot up.

What Happened: The apex cryptocurrency traded 7.13% lower at $56,528.65 at press time. BTC has fallen 6% over a seven-day trailing period. 

Some other cryptocurrencies including DOGE did not follow BTC’s lead and were seen trading in the green at press time.

DOGE was up 6.76% at $0.31. Neo (NEO) soared 31.29% at $125.44 and Solana (SOL) shot up 27.06% to $32.16.

Ethereum (ETH) is largely mirroring BTC’s decline and has fallen 11.6% since its Friday highs. As of press time, the second-largest cryptocurrency by market cap traded 4.57% lower at $2,252.33 in a 24-hour period.

Last week, both BTC and ETH hit their all-time highs. BTC and ETC traded 12.52% and 11.55% below those levels at press time.

The mean reason for the decline of BTC over the weekend was a power outage in China’s Xinjiang region where a large portion of the world’s BTC is mined, as per Reuters.

Why It Matters: People “may have sold on the news of the power outage in China and not the impact it actually had on the network,” said Luke Sully, CEO of Ledgermatic, a digital asset treasury specialist.

Analyst Willy Woo noted on Twitter that the price and hash rate of BTC have a strong correlation.  

Rumors of regulators in the United States charging unnamed financial institutions with cryptocurrency-related money laundering was another precipitating factor in BTC’s weekend fall, Cointelegraph reported.

Meanwhile, the funding rate — a measure of longs or buyers in the market — fell to its lowest since September 2020, which is an indicator of fear in the market, Cointelegraph reported separately.

A mix of fear, new investors with weak nerves, and rumors led to the decline in BTC but this left DOGE unaffected, according to CoinDesk.

DOGE hit an all-time high of $0.437 on Friday and has been on the upswing since it crossed the psychologically important $10 mark last week receiving a boost from social media. The cryptocurrency is on a run buoyed both by the “Doge Army” and Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk.

DOGE, SOL, and NEO have maintained the social momentum and occupied high places in the Stocktwits list of top ten trading tickers at press time.

Read Next: Dogecoin Creator Says What Sets Meme Crypto Apart From ‘Thousands Of Failed Coins’ Is Being A Meme

Photo by Play Your Place on Flickr

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