Data Shows Dogecoin Pump Was Driven By Robinhood Buyers

Tony "The Bull" Severino

Last Updated: June 11, 2024 2:13 pm

3 mins read

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Last week, Dogecoin exploded with an 800% intraday move. On-chain data looking closely at daily active addresses, however, suggests that the pump and dump was almost entirely driven by Robinhood buyers.

Here’s what this means for both sides of the coin.

Dogecoin Reignites Retail Interest in Crypto After 800% Rally

Dogecoin’s recent rally lived up to its “much wow” catchphrase, climbing 800% from under a penny to more than 6 cents per token.

Dogecoin became the target of a group of organized buyers after shares of GameStop and other stocks were restricted from trading last week. With those stocks unable to trade, the trend turned toward cryptocurrencies.

The meme-based altcoin was an easy choice for the organizers who range from Redditors to Tik Tok content creators, mostly because of its low price and adorable pup logo.

Doge pumped over 800% in a single day | Source: DOGEUSD on TradingView.com

Fundamentally Flawed: Why Buying Altcoins On Robinhood Is The Wrong Idea

Even though investors piled into Dogecoin en masse, pumping its price, daily active addresses failed to set a new high, according to CoinMetrics.

This data suggests that the pump was driven primarily by Robinhood investors, as new users on proper crypto platforms would have resulted in new address creation.

Daily active addresses climbed but failed to set a new high | Source: CoinMetrics on Twitter

Robinhood gained popularity over the last several years by offering retail investors quick and easy exposure of top traded company shares through a sleek user interface.

The platform introduced cryptocurrencies in 2018, but Robinhood doesn’t work the same way as most cryptocurrency exchanges. Any cryptocurrencies bought on Robinhood cannot be moved to and from the platform, meaning users don’t actually own the crypto.

On-chain data shows a lack of a corresponding spike of new addresses that matches the growth in price. The lack of fundamental growth in the meme-coin likely means that any price increase from organized pumps won’t be sustainable. However, the rally was enough potentially to ignite altcoin season in the crypto space.

Related Reading | Robinhood Reminder: Not Your Keys, Not Your Bitcoin

Dogecoin in the past has been used successfully as a barometer of sentiment in altcoins, and its emergence is a sign to take positions in coins with more utility and value.

Coinciding with all of this, Google searches for “buy crypto” have begun to outweigh “buy Bitcoin.” Those who do end up buying more crypto due to the allure of Dogecoin-like gains, should do so from a platform that allows you to self-custody the assets such as Coinbase.

Featured image from Deposit Photos, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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