Many areas of the investing market have been a rollercoaster ride over the past year, to say the least. Still, nothing compares to the bullish frenzy the cryptocurrency market has been experiencing just these past few months. And if there’s one coin that’s been ranking high in search engines because of SEO and popping up on everybody’s newsfeed, then the crown most definitely goes to everyone’s beloved meme-inspired crypto, Dogecoin.
However, with its current price hovering at 0.53 after a drop from its all-time high of 0.73, it seems that both optimists and pessimists speculating where the trend goes next has everyone stuck at 50/50. So, today we’ll be exploring both the upsides that support the bullish sentiment and the downsides that indicate a steep sell momentum. Hopefully, we can determine what best investing approach to take moving forward.
What Indicators Support Dogecoin’s Bullish Trend?
On the more positive notion, many people believe that Dogecoin’s bullish rally still has a long way to go. Once it goes past a valuation of a dollar, it will safely create support and continue to push even more with further developments. And just to put things into perspective, Dogecoin’s price a month ago was at a measly 0.06, and considering that it’s grown over 20,000% since its creation, it has outshined every financial instrument available.
Strong And Engaging Community:
No cryptocurrency community comes close to how strong and engaging the Dogecoin community has become. It has created its own “hodling” culture and grown into a family that demands to see Dogecoin fly straight into the moon with their diamond hands. And while community effort may seem like a small matter, it has been the one driving factor making cryptocurrency investing seem more approachable and bringing in more newbie investors.
Understanding Network Effect:
Elon Musk is the current face of Dogecoin. Having someone as famous as him drives the network effect even stronger, wherein the price consistently rises as the number of users increases. And it doesn’t stop at Elon, even billionaire entrepreneur Mark Cuban shows his support for Dogecoin, and we’re bound to see more famous figures and celebrities follow in suit. Therefore, if the network effect gradually compounds over time, this will undoubtedly support a bullish trend.
Anticipated Coinbase Listing:
Once Dogecoin lands the long-awaited Coinbase listing, this will establish the coin’s legitimacy and transition it from a meme coin into an actual cryptocurrency that can stand beside other giants like Bitcoin and Ethereum. And while many fear that Coinbase’s trading fees will dissuade some people, the platform will help welcome newcomers looking for an accessible way to buy Dogecoin.
Follow In The Footsteps Of Bitcoin:
Historically, cryptocurrencies like Bitcoin have been well known for experiencing extreme bullish rallies only to come down steeply at new support, repeating the cycle all over again. And many believe that Dogecoin could very well replicate this market trend, and as soon as it makes another upward move, it will safely fall back down to gather more volume for the next one.
What Current Trends Say Otherwise?
Likewise, it’s not all sunshine and rainbows for Dogecoin. While many people love the idea of a community-backed cryptocurrency that’s been making overnight millionaires, there are still threats that foretell an impending fall. And it wouldn’t be a fair analysis if we didn’t explore the opposing end that supports a bearish sentiment for the beloved meme coin.
No Apparent Support:
As of current, anyone fairly decent at technical analysis will point out that Dogecoin doesn’t have any apparent support, and any convincing break could bring the price down dramatically. Unlike Bitcoin that’s proven itself over the years, the sudden rise of Dogecoin has only occurred over the past few months, which isn’t enough time to build trustworthy levels of support.
Future SEC Regulations:
The time will come when SEC imposes regulations on what they consider to be currencies and securities in the crypto-space. There’s no telling how that will affect the overall market sentiment. As a result, any long-term investment toward Dogecoin is not advisable considering that the cryptocurrency market remains a niche and emerging financial instrument by today’s standards.
SNL’s Massive Sell-Off:
If you were watching Elon’s appearance on SNL, then you’ll know that instead of breaking past one dollar, Dogecoin’s price actually saw a massive sell-off. It hovered around 0.36 at its lowest and has managed to come back to 0.52 as of recent, but it does prove that Dogecoin has thrown away all technicals and is currently fluctuating on a lot of fundamentals. Therefore, one wrong move can spark an even greater sell-off, one much worse than the SNL.
Invest At Your Own Risk
In conclusion, there’s way too much uncertainty about Dogecoin before we can consider it a viable long-term investment, and we still recommend traditional forms that have proven to be effective. However, we also wouldn’t want you to miss out on some quick profits brought about by this crypto wave, so invest at your own risk with money you’re willing to lose.