Too late to buy Dogecoin?
Dogecoin has had an impressive rally over the past few years. In five years, the coin's price has risen by more than 100,000% against the US dollar. Between November 2017 and May this year, the coin rose by more than 124,000%.
In contrast, gold rose by more than 40% over the same period and bitcoin rose by around 8,000%. This makes Dogecoin one of the best performing assets of the last half century. So, is it too late to buy Dogecoin?
Dogecoin is a meme coin that was launched in 2014 by Jackson Palmer and Shibetoshi Nakamoto. The coin was launched as a joke with the aim of becoming an alternative to bitcoins and lightcoins. Like BTC,
Dogecoin is a proof-of-work cryptocurrency that is mined using computers that solve complex mathematical calculations.
Dogecoin can be used as a peer-to-peer currency. This means that people can send it to each other in a relatively simple way.
The currency can also be used for purchases wherever it is accepted. Because of its volatility, very few companies accept it as a means of payment. AMC, the world's largest film company, has hinted that it will start accepting Dogecoin.
Dogecoin's popularity has led to its rise on the cryptocurrency radar. Today, Dogecoin has a market capitalisation of more than $28 billion. This makes it the 10th largest cryptocurrency in the world. In comparison, Dogecoin is more valuable than Southwest Airlines, Lazard, United Airlines and Box.
Like most cryptocurrencies, most people who own Dogecoin do so because of its investment potential. Most holders do not use it as a medium of exchange. Therefore, its future price behaviour will mainly depend on the overall performance of other cryptocurrencies.
In my view, I expect cryptocurrencies to do relatively well in the coming years as they become a favourite investment option among young people.
However, the biggest risk to the currency is its close association with Ilon Musk. While he has been good for the coin, there is also the possibility that he might change his mind. This, in turn, would push the coin lower.
Another risk is that most of the Dogecoin in circulation is owned by a small group of people or organisations. This ownership could bring its price down if they decide to close their deals. You can visit https://exnessgroup.org/ to find out how to buy Dogecoin.
There are several reasons why the price of Dogecoin has jumped over the past few years. Firstly, this rally is mainly due to its correlation with other cryptocurrencies. A closer look shows that most digital currencies have risen over the past few months.
Indeed, the total market capitalisation of all cryptocurrencies tracked by CoinGecko has jumped to almost $3 trillion. This makes it one of the largest asset classes in the world. It's hard to find a cryptocurrency that hasn't jumped in the last five years.
Secondly, like all cryptocurrencies, DOGE has thrived thanks to the Federal Reserve's easy money policy. In most cases, risky assets tend to thrive during periods of low interest rates.
Elon Musk and Dogecoin
Third, and most importantly, the coin has surged because of Ilon Musk, the founder and CEO of Tesla and SpaceX. Musk is the richest man in the world, with a combined fortune of more than $310 billion. According to Bloomberg, his net worth is $100 more than that of Jeff Bezos, the second richest man in the world.
Many young people admire Ilon Musk for his achievements at such a young age. He has over 65 million followers on Twitter.
So his support for Dogecoin has had a big impact on the coin. In a past tweet, he confirmed that he owns some of the coins. His tweets and comments have encouraged many young people to buy the coin.
In addition to that, Dogecoin's price has risen because of its popularity among social networks such as Twitter and Reddit. Most importantly, it is one of the most popular coins on trading platforms such as Robinhood and Cash App. It has become a popular way to tip hotels and other employees.
Technical analysis of Dogicoin
On the weekly chart, we can see that the price of DOGE has been in a tight range for the past few weeks. The coin is trading at the same level as the 50-day and 25-day moving averages. It has also formed a bullish pennant, which is usually a positive sign.
In addition, it has struggled to fall below a key support level at $0.1600. Therefore, there is a chance that the coin will have a bullish breakout in the coming weeks. If that happens, the next key level to watch will be $0.72, which was an all-time high.
