A meme coin that remains very popular with its core base, Dogecoin (DOGE-USD) has been on a tear to start this year. Now up more than 120% since the start of the year, Dogecoin’s rise is up there with some of the best high-growth assets in the market. And with plenty of prospective catalysts to ride this growth higher, there’s a reason why certain investors are sticking with this Shiba Inu-inspired token.

For one, Elon Musk’s continued support for Dogecoin has provided speculators with a number of catalysts in recent weeks to point to. Musk has hinted at some integration with his X Payments platforms at some point, providing near-term boosts for this token on its ride higher. Additionally, the Dogecoin community continues to look toward other catalysts, including meme coin spinoffs, which could provide additional value for investors over time.

Let’s dive into whether these catalysts are worth buying into right now.

Surpassing Cardano

Dogecoin’s recent rise should be put into perspective. This 120% surge is notable, largely due to Dogecoin’s size. With a current market capitalization of more than $29 billion, Dogecoin is massive. This incredible heft is one reason why bears think it’s a token that may simply have a more difficult path to big gains – a tremendous amount of capital will need to flow into Dogecoin to propel its surge higher.

Nevertheless, Dogecoin’s recent move has pushed it past Cardano (XRP-USD) for 8th spot in the overall market, and it actually surpassed other larger tokens during its previous rally to two-year highs.

Of course, as a momentum play on the overall crypto market, Dogecoin could have further to run. This rally could be propelled by continued short liquidations (short seller contracts falling apart), leading to an upward spiral in price. Upwards of $5 million per day of short liquidations has been seen during this token’s recent rise. If this trend continues, it’s entirely possible another squeeze higher could be on the horizon.

Short-Term Investor Sentiment Pushes Memecoin Prices Down

That said, since hitting a two-year high of more than 22 cents per token in recent weeks, Dogecoin has cooled off. Now trading around the 20 cent level, DOGE is still within 10% or so of its recent peak. And any violation of that peak could lead to higher prices in the near-term.

The question is whether the recent selloff in meme coins represents a true shift in investor sentiment. Many in this space continue to trade on momentum, and Dogecoin is certainly one of the most speculative and volatile assets to buy to trade this factor.

However, I’m of the view that this recent dip may be dangerous to buy into. While Dogecoin certainly has a few speculative catalysts investors are relying on for big gains, there are a number of technical indicators out there that suggest Dogecoin’s price action may suffer in the near-term.

So, as an asset used primarily to trade short-term momentum, I’m not sure stepping into this token right now makes sense.

What Now?

Created as a joke by its founders, the intent of Dogecoin was to have no utility outside of its core community. That said, investors have clearly continued to hold steady, and the long-term case for this token has been surprising to many (myself included).

My view is that over the long-term, Dogecoin’s valuation should trend a lot lower. And as a near-term speculative trading vehicle, I’m not seeing enough to justify buying this token on this recent dip.

Accordingly, my take is that investors should probably sit this one out. Those looking to take positions may want to cap their time horizon to days or weeks at most.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.