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Dogecoin Climbs 18% on DOGE Futures Hopes, Bitcoin Nears $68K

source-logo  coindesk.com 21 March 2024 10:14, UTC

Crypto markets experienced volatility overnight as bitcoin and ether tumbled before recovering to trade 15% higher than their Wednesday lows.

Wednesday's decline was attributed to profit-taking from last week's rally and a flush of leveraged bets on higher prices, with some traders suggesting a technical downtrend.

Sentiment reversed after U.S. Federal Reserve Chair Jerome Powell's dovish FOMC speech, leading to a jump in BTC, ETH, and other major tokens, particularly those of layer-2 platforms and meme coins.

The inherent volatility of crypto markets was on full display overnight as bitcoin (BTC) and ether (ETH) tumbled, then recovered to trade as much as 15% above their Wednesday lows .

BTC and ETH rose as much as 11% in the past 24 hours, leading gains among major tokens. Solana's SOL, Cardano's ADA and BNB Chain's BNB added as much as 8%, data from CoinGecko shows. The CoinDesk 20 Index, a measure of the broader crypto market, was recently 7.62% higher.

Tokens of layer-2 platforms, or blockchains based on Ethereum, led as a sector with an average jump of 25% in the past 24 hours, CoinGecko data shows. Meme coins followed with a 16% jump.

On Wednesday, markets started to slide in early Asian hours amid profit-taking from last week's rally and a flush of levered bets on higher prices. Overall capitalization dropped over 15% in the past week, as reported, with some traders stating that bitcoin showed signs of a technical downtrend – which indicated further losses in the offing.

Sentiment reversed later in the day after U.S. Federal Reserve Chair Jerome Powell's FOMC speech hit a dovish tone. The central bank maintained its outlook for three rate cuts this year despite hotter-than-expected inflation figures.

Singapore-based trading firm QCP Capital said in a daily note that buying was led by spot transactions – a better reflection of demand than futures-led trading, which is usually more speculative.

"Demand seems to be largely spot driven with little change in funding rates. (BTC spot ETF flow data in the next few hours will confirm the spot demand)," QCP said in a Telegram broadcast.

Dogecoin (DOGE) jumped 18% after a March 7 filing from the prominent crypto exchange Coinbase went viral on X, showing it plans to offer DOGE, litecoin (LTC) and bitcoin cash (BCH) futures as early as April 1.

Some traders considered the move as a possible precursor to an eventual spot DOGE exchange-traded fund (ETF).

Coinbase – known for its strict listing criteria and regulatory compliance – said in the filing that DOGE was beyond a "joke" token in the current investing climate.

"Dogecoin's enduring popularity and the active community support suggest that it has transcended its origins as a meme to become a staple of the cryptocurrency world," it said.