DOGS, the popular Telegram meme coin, has suffered a harsh reversal as its hype among market participants waned.
DOGS token sell-off has continued
DOGS (DOGS) price has dropped by over 38% from its highest level last week and was trading at $0.0011, its lowest level since Aug. 26.
The decline coincided with a sharp drop in its volume on centralized and decentralized exchanges. Data from CoinGecko shows that its 24-hour volume on Monday stood at $490 million, down from last week’s high of $1.8 million. It was the lowest intraday volume since it started trading.
The data also indicates that the token’s futures open interest has started falling, indicating that demand among investors is fading. Its open interest stood at over $118 million, down from last week’s high of $149 million.
DOGS token has likely dropped for three main reasons. First, the news of Pavel Durov’s arrest in France has started to fade as fans await the next action by French authorities.
Durov, the founder and owner of Telegram, was arrested and is facing up to ten years in prison for activities conducted on the app. Many crypto enthusiasts, including Elon Musk and Kim Dotcom, have criticized the allegations on free speech grounds.
DOGS’ popularity and initial jump last week occurred as traders followed his arrest and arraignment.
Cryptocurrencies are not doing well
Second, the DOGS token has also retreated due to waning sentiment in the crypto industry as Bitcoin (BTC) remains in a tight range. The coin has stayed between $57,000 and $60,000 in the past few days. In most cases, altcoins struggle to find direction when Bitcoin is rangebound.
Third, DOGS’ price action has mirrored that of newly launched tokens. Typically, tokens rise in the first few days and then drop after a few days as some initial buyers start to exit their investments.
Other Telegram tokens had a similar price action. Notcoin (NOT) initially jumped to a high of $0.02930 in the first few days and then crashed by over 71% to $0.0083. Similarly, Pixelverse (PIXFI) rose to $0.10 after its airdrop and has now dropped by over 93% from its all-time high.
Therefore, there is a risk that the token will continue falling in the near term as many investors who bought during the airdrop continue selling. If this happens, it may drop below the psychological point of $0.0010.
