In the crypto world, in addition to Bitcoin, Dogecoin is currently receiving a lot of attention. The former fun currency has grown in strength in recent weeks thanks to prominent support and set new records. However, the price of the cyber coin has now fallen significantly again. Have the bears now taken over the helm at Dogecoin?
• Dogecoin has come back significantly after the latest record
• Elon Musk and Bitcoin as the main influencing factors on Dogecoin course
• Strength of recent price decline matches definition of bear market The Dogecoin has done a real roller coaster ride in the last few weeks. While the cyber currency at the turn of the year according to “CoinDesk” only cost 0.0053885 US dollars, it is now 0.057271 US dollars. Since the beginning of the year, it has achieved an incredible price increase of almost 960 percent (as of February 19, 2021). But it went even higher in the meantime: On February 8, the Dogecoin reached a record high at 0.086 US dollars.
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The rally of the cryptocurrency was fueled on the one hand by Reddit users, who agreed to buy together online, and on the other hand by Tesla boss Elon Musk, who celebrated Dogecoin on Twitter in sometimes strange tweets. But since the record high, the cryptocurrency has been falling significantly again – and Musk is not entirely innocent of that either. Last Monday, he caused the price of Dogecoin to slide by more than 13 percent by saying on Twitter that he would support it if big Dogecoin owners sold the majority of their coins. In another tweet, he even topped it up and claimed that he would even pay these Dogecoin holders real US dollars if they closed their accounts.
I will literally pay actual $ if they just void their accounts
– Elon Musk (@elonmusk) February 15, 2021
It can be assumed that as a result not only the large Dogecoin owners mentioned – according to “CoinTelegraph”, only twelve people hold around 50 percent of all Dogecoins – sold some of their cryptos, but also many small investors out of uncertainty – or in the hope of monetary gifts from Elon Musk – have separated from their dog coins.
Dogecoin im Bärengebiet?
With the price slide at the beginning of the week, the Dogecoin is now around 33 percent below its recently marked all-time high (as of February 19, 2021) – and technically fulfills the criterion for a bear market. One speaks of such a thing when an asset comes back from its most recent highs by 20 percent or more. Another hallmark of a bear market is also negative investor sentiment, which Elon Musk’s latest tweets may well have triggered. Paradoxically, the records for Bitcoin also suggest that investors may now have a more negative attitude towards Dogecoin. Because when the largest cryptocurrency increases significantly, crypto investors often turn away from altcoins and towards bitcoin. This also fits that, according to “MarketWatch”, the Dogecoin was already around 20 percent below its all-time high on Sunday a week ago, i.e. on the day of a new Bitcoin record and the day before the Musk tweets, and according to “CoinTelegraph” other Altcoins as well have lost 20 percent or more of their value since the new Bitcoin record.
But another characteristic of a bear market is usually that the price slump continues quite continuously over a longer period of time, i.e. several weeks or even months. If the price slide lasts only a few days, one usually speaks of a correction – no matter how much it goes down. Accordingly, it is currently a little too early to speak of a bear market for Dogecoin – especially since the cyber currency had to cope with an even harder setback in January and recovered from it without any problems. Because at the end of January the Dogecoin course fell according to “CoinDesk” by almost 70 percent from around 0.078 US dollars to 0.024 US dollars. After that, however, it soon went up again to the new record high on February 8th. The price loss was therefore short-lived and did not mark the beginning of a bear market, even if its size would have been sufficient for it. Currently, the downward movement in Dogecoin is more continuous and long-lasting than in January, but one should not speak of a bear market at this point in time.
Reddit users have probably not written off Dogecoin yet
On Reddit, opinions in the Dogecoin sub-forum are divided as to whether the Dogecoin is in a bear market or just in a correction. In the further sub-forum “SatoshiStreetBets”, through which users have agreed to jointly buy crypto, the belief in Dogecoin still prevails. “Don’t panic, everything is fine dogecoin,” writes a user referring to the last tweets from Elon Musk and points out that a less strong concentration of Dogecoins on individual owners is ultimately a good thing and the cryptocurrency in the long term help you succeed. According to “MarketWatch”, some users of the forum are still hoping to bring the Dogecoin to USD 1.00.
However, experts remain critical of the former Spasscoin, as it has no real use compared to other cryptos. For example, Nic Carter, a venture capitalist in the crypto sector, told CNBC that average investors could be harmed if they speculatively place bets on an asset with no real purpose. Carter was also critical of Elon Musk and his tweets: “It’s somehow strange to see that Elon Musk is so enthusiastic about it,” said the expert. Even if Dogecoin is currently not in a bear market with certainty, it cannot hurt for investors to be on their guard.
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Price slide record high Dogecoin correction bear market