Rapper Snoop Dogg and Osculation' Gene Simmons have been both expressing their back up for the "Doge Army" over the weekend alongside Tesla CEO Elon Musk. As a issue, the cryptocurrency'due south price has rallied once again by 27% on Feb. 7. DOGE is the native cryptocurrency of Dogecoin, which has become a household proper name in recent months.

Following the Gamestop and Robinhood saga, many traders rushed into the cryptocurrency market. DOGE was the kickoff cryptocurrency that saw retail fear of missing out (FOMO), specially among the r/Wallstreetbets community members.

"Yup. I bought even more Dogecoin," Simmons wrote on Feb. half-dozen, continuing:

"Why? Because I believe it will go upwardly. But that's just me."
DOGE/USDT i-solar day candle toll chart (Binance). Source: TradingView.com

Traders betoken caution confronting the DOGE rally

DOGE is typically considered a meme cryptocurrency inside the crypto market that started out every bit a joke. It does not have a use case, but it has an active community around information technology.

Hence, when DOGE begins to rally due to an unexpected catalyst, like Elon Musk's DOGE meme or a r/Wallstreetbets-fueled pump, it ofttimes sees an explosive uptrend in a short menstruation.

However, traders are urging caution in dealing with Dogecoin. Donalt, a popular and pseudonymous cryptocurrency trader, said the amount of "normie shilling" effectually DOGE is unprecedented.

The trader emphasized that DOGE for the long term is not a favorable trade, and information technology will eventually come up down, so traders need to arroyo it with caution. He wrote:

"The electric current DOGE situation is quite funny. Don't think we've seen this amount of normie shilling in this space earlier and it'south for our beloved silly DOGE coin of all things. Every other day some other celeb comes out talking about DOGE. I see zero reason to counter trade that. That said if you lot're trying to get into DOGE for the long term - Y'all'll requite back everything you've made. So, sell partials on the way upwardly or try to time the top by analyzing how much steam is left in the normie shill tank. Buying DOGE should but be done with selling in mind."

When the r/Wallstreetbets rally occurred on Jan. 29, the trading volume of DOGE briefly surpassed Bitcoin on Binance. This means that there is currently a lot of hype at the moment, which also suggests that a pullback should not come equally a surprise.

There is a difference between DOGE now and earlier

During the Jan. 29 DOGE cost rally, the futures funding rate was highly negative. On average, the funding rate of a cryptocurrency hovers at effectually 0.01%.

At the time, the futures funding charge per unit of DOGE was hovering at around -0.one%. This meant that it was x times lower than average during that period.

The futures funding rate is a mechanism that incentivizes buyers or sellers based on market residue. If there are more than buyers in the market, and so sellers take to pay buyers a fee every 8 hours.

If the funding rate is negative, it ways sellers are paying buyers, and if the rate is positive, buyers are paying sellers.

Currently, the funding rate of DOGE Is significantly in a higher place average at around 0.1%. This makes a long squeeze likely, which could cause a short-term drib if cascading liquidations occur.