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Cryptocurrencies

Is Dogecoin following the dodo?

September 23, 2021
BY Paul Reid

Released in 2013 for a joke, Dogecoin was named after the popular Shibu Inu dog “Doge” meme. The prank led to a thriving fanbase with regular transfers. Today, thanks to low fees and fast speeds, crypto traders like to use Dogecoin as an intermediary when shifting coins between cryptocurrency exchanges. Nothing seems to be happening on the DOGE front these days, but there could be a simple explanation for that.

Just a few months ago, Dogecoin was on the lips and lists of altcoin traders everywhere and even captured the attention of Elon Musk, who was dubbed the unofficial CEO of Dogecoin. 

Despite all the media attention and the global interest, DOGE has weakened significantly over the last few weeks. But can we expect a price rise in the future or is DOGE destined to be another “here today, gone tomorrow” altcoin?

Will DOGE rise again?

In 2020, DOGE dominated social media after TikTok users attempted a retail pump & dump of the coin by asking “why is Dogecoin going up?” Of course, the large investors took advantage of this hype and pulled out when the fruit was ripe, and the Tik Tok pump was deflated before the hype hit full saturation.

Raising the Dogecoin price is actually more problematic than raising most cryptocurrencies as the supply is endless. DOGE doesn’t have a capped or finite supply. Currently, over 100 billion coins are in circulation at a price of $0.20, which puts the soft market cap at just over $25.6 billion, a big fall from the $80 billion high of August 2021.

Dogecoin’s price shows a steady decline over Q3 2021, and traditional forecasting suggests an even worse Q4 is to be expected, but what if this was the quiet before the storm?

For the big-league pump & dump crowd to take interest, the price must first be low, a buyer’s market. Only when a price stabilizes at a new rock bottom will a buy frenzy become an option. Is the price low enough? How low must it go?

Dogecoin trading chart

Is Dogecoin headed for a rally?

Trading DOGE

As Dogecoin settles into a new and stable low range, the pump and dump investors will be standing ready for the next DOGE hype to ignite a rally. 

Pump and dump investors are well funded and take advantage of the mechanics of cryptocurrency pricing. When people buy, prices rise, which prompts more people to buy, which leads to a high exit price for those who started the rally. The rally causes the momentum to build, but the price move needs a kick to get started.

The hype is always significant enough to capture the attention of world media and financial reports, so keep your eye on the news channels and social media.

A word to the wise trader, leveraging crypto can be risky, as coins tend to be very volatile. Be sure to set a modest leverage to suit your trading budget. If DOGE rockets, you’ll be celebrating, but if the market dips before the rally, your account will suffer, so consider setting stop loss for peace of mind.

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