This year has been wonderful for all the bulls in the cryptocurrency markets. People that held long positions or hodled popular coins such as Bitcoin, Dogecoin and many other popular altcoins made immense returns. The GME mania introduced a lot of opportunities to the retail side and thanks to the stimulus money, many people are fearlessly building aggressive positions on many popular asset classes. While it may be tempting for the masses to buy into the mania, it is not a wise decision from the risk management perspective.
After all, the bull run has left the station and the chasing price now in the short term horizon might not be worth it for many of you. Currently, people are wondering whether this meme altcoin has the potential to reach $1 as it acts as a major milestone. Few people on social media are giving insane predictions and claiming that this coin will reach upto $10 in the coming years.
Without doubts, we can say that most self proclaimed traders on Youtube media are making exaggerated predictions and it is not backed up by solid data. To know what exactly Dogecoin is and all of the main aspects related to this asset class, read this detailed guide till the end. If you have any doubts, then feel free to comment below and we will respond to your queries at the earliest.
What is Dogecoin?
Dogecoin is a form of digital currency. Initially, the founders designed this cryptocurrency as a joke and their intention was to poke at Bitcoin. Few years down the lane, even the creator’s themselves are shocked by the kind of traction it has earned and it shows the power the internet has to offer. Dogecoin does not solve any unique problem and compared to major protocols, it does not offer any specific competitive advantage either.
Most of the market cap it earned over the years is all thanks to memes and the celebrities that choose to endorse it. At the time of publishing this post, this coin has a market cap of $30 billion dollars and it has lost 40% value in less than a week’s time period. Obviously, the volatility levels are huge and any person trading this asset on leverage without proper hedging will lose all of their money sooner or later.
On the bright side, this coin is indeed accepted by a lot of online merchants and the fees structure is also lite on the pocket. You may be interested in learning about more trading or investing opportunities involving this coin. To learn about both the merits and demerits of getting involved with this pair, read our report till the end.
Remember, analysis is one part of the equation and in order to sustain and thrive in this environment one needs to focus on risk management as well. Note that, all of the opinions expressed in this article is for general information only and none of this can be considered as financial advice.
The world of cryptocurrency loves anonymity for some reason. Story of Satoshi, the founder of bitcoin is a legendary one and given the potential Bitcoin presents, it is understandable as to why the creators want to keep their identity as a secret. Dogecoin is a different breed and almost everything about the digital currency can be found out with just a Google search. Billy Marcus and Jackson Palmer created this coin back in 2013.
Both the founders are software engineers and their goal was to just create a payment mechanism based on blockchain technology. Today, this coin has exploded in terms of value and it has created many millionaires during the current bull run. There are dedicated forums and subreddits discussing the merits and demerits of this altcoin and it looks like the trans is not going to fade anytime soon.
Moving on to the creation of the coin itself, anyone can mine this crypto with the help of CPU or GPU. The total supply of the coin is unlimited and that itself is a model that is not liked by many crypto enthusiasts. If you are serious about the mining aspect, then we recommend you go for GPU mining as it yields much more returns compared to the counterpart.
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Dogecoin Bull Run Explained
Whenever a cryptocurrency experiences a parabolic trend, it gets a lot of media attention and the self-proclaimed buch of traders fuel the rally indirectly by making videos on it on social media platforms. It is human nature to be enticed by opportunities that can make an individual boatload of money, but you need to watch the timing aspect carefully or else things might not work very well for you in the industry.
In recent times, Dogecoin received a lot of recognition from many celebrities and many notable personalities have tweeted about it. Billionaire Mark Cuban said that he is never selling a Doge again ever. The endorsement from well known figures made the retail side invest aggressively and the price just reflected the market sentiment.
The asset gained over 3,600% in a little bit over 365 days and that is a huge deal. While there is still room for bulls to conquer, it does not look like it is going to happen anytime soon. The retracement to the previous support zone was long anticipated and the market is currently going through a massive correction phase.
If your plan is to invest for the long term, then the altcoin might be worth looking into as it has lost half of the value from the peak price, but if you are a day trader, then it will be best to use this pair without any kind of leverage. Double digit returns are a common occurrence in the crypto world. However, for best results and to avoid liquidity related issues, always stick with coins that have huge market cap.
Will Dogecoin Hit $1?
Many traders tend to avoid doing basic math whenever they are making a prediction or forecast for the long term. Parabolic move is something that every instrument will experience during some point from their inception. However, during the parabolic rise, the euphoria in the market will be huge and as a result, it does not make sense to make predictions based upon the data in that period.
Note that we are not ruling out the possibility of this altcoin reaching the $1 mark, but for it to happen the market cap of the coin has to go above $100 billion dollars and that is not an easy target. Moving on to more bizarre claims of this coin reaching upto $10 in the next 3 to 5 years, this target is insane and it does not look sustainable from a mathematical perspective. Bull run always entices people and if you are one of the early adopters, then it is possible to earn immense returns.
Unfortunately, the golden era of top coins have passed and now one has to be very lightly positioned in order to make meaningful returns. Always keep in mind that it is not worth it to go all in on any one coin, instead the best approach is to invest only the kind of amount you can afford to lose and diversify the risk to the maximum extent.
Dogecoin Meme Element Explained
Meme was just a niche that gained a lot of traction on social media platforms. It had a very humble beginning and no one thought it had the power to change the course of trading instruments. Retail traders along with Reddit traders completely disagree with the statement mentioned above and they are the ones that aggressively target certain asset classes and try to pump them using their collective buying or selling power.
Whether the philosophy of the redditors is right or wrong is a different question, but the thing they have managed to do as a group is mind blowing to say the least. Surprisingly, they do have all the right disclaimers in place and they encourage people to put in negligible amounts only.
On the flip side, there are tons of people that have lost huge money by betting heavily on random picks and are regretting their decisions. So, think twice before trusting a stranger online and never be daring enough to take on the markets without an exit plan.
Elon Musk Effect
Elon Musk is an amazing businessman and an entrepreneur. He has got a loyal following on Twitter and his follower count is rising rapidly every day. Whenever a famous personality tweets something, it is going to affect the marketplace in a huge manner as people trust the information from specific sources and respect their way of thinking.
Elon Musk is no stranger to being transparent about the investments he has made in the realm of cryptos and his company Tesla is currently not only accepting Bitcoin as a payment method but also has invested $1.5 billion dollars. His recent tweets about the way he feels about the crypto world has encouraged millions of his followers to take initiative and this phenomenon can be termed as Elon Musk effect.
Whenever you are getting involved with the instruments that move up or down daily by more than 10%, you need to be very careful with the allocation of funds. Trading derivatives might help, but at the end of the day, the risk element is something that just cannot be eradicated completely unless you are playing for the long term and have secured an entry price in the early stages.
Due to the extreme demand in the crypto space, the volatility is literally going through the roof and that is not good news from a newbie’s perspective. We strongly suggest all of our audience not to follow any Youtuber or self proclaimed traders as most of them are not qualified enough to give investment advice.
Your best bet to make significant gains would be to take advice from a licensed financial adviser before investing into any assets. Remember, this space looks amazing from the outside, but once you enter things might get brutal if you are not well prepared.
Dogecoin is down by more than 40% from all time highs at the time of publishing this post. Most altcoins are in a serious bear market and with everything going on, things do not look great for the bulls for a considerable amount of time.
Another bull run is bound to happen, but timing the markets with the current situation is almost an impossible task. While there is nothing wrong in slowly building positions, do not forget to get educated about the markets first and then proceed with building positions. Remember, the true key to wealth is knowledge and nothing else.
Have you invested in Dogecoin? Do you like this cryptocurrency? Comment your answers below!
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