The Dogecoin price only hit $0.09 when Elon Musk tweeted that SpaceX would accept DOGE as a form of payment as it is by Tesla, then dropped.
Within the space of one green four hour candle, the DOGE price moved from $0.0773 to $0.09, a 16% impulse to the upside. However that was only a bearish retest of the 100 EMA (exponential moving average) and it immediately retraced most of the move. Will Dogecoin ever go back up?
Only accepting the cryptocurrency for merchandise, is hardly a ringing endorsement of Dogecoin as the future of money and the world’s reserve currency – as Musk has stated it could be.
Update – Dogecoin has continued its downtrend since this post, to six or seven cents – we recently reviewed a promising new meme coin presale with greater utility, Tamadoge (TAMA).
Is Dogecoin Dead Now
Elon Musk tweets aren’t as bullish for the crypto markets or Dogecoin as they used to be – earlier in May the billionaire tweeted that Dogecoin has potential as a currency. The price is the same then as now, around $0.08.
In April Robinhood CEO Vlad Tenev stated Dogecoin could potentially be a future currency, in a 12 tweet thread – however only if it addresses some fundamental issues with its scalability and speed:
- Dogecoin is inflationary with an infinite supply – although the inflation rate does decline over time due to a fixed issuance rate, and is lower than the inflation rate of USD
- The total supply is already high at 132 billion – although the circulating supply is completely unlocked
- Dogecoin’s block time of one minute doesn’t outperform other financial transaction platforms like VISA – he recommended the DOGE block size limit be reduced to ten seconds
Since Robinhood exchange listed Dogecoin and Vlad Tenev posted that thread – which mostly praised Dogecoin especially for its much lower transaction fees than major card networks, averaging $0.003 – the price of Dogecoin has dropped almost 50% from $0.14.
Why Is Dogecoin Going Down
The price of DOGE has retraced every bullish news development and Elon Musk tweet to go down further, in what has been a 12 month bear market so far – the correction began in May 2021, after the Dogecoin all time high of $0.74 hit on May 8th.
Dogecoin didn’t appear dead at first as it found support at the EMA 8 for most of the rest of the year – not closing a monthly candle below it until December when it broke down to the EMA 21.
Dogecoin price chart – monthly candles
In January 2022 it bounced back to that EMA where it was rejected, and again in April. As of May 2022 the Dogecoin price opened below both the 8 and 21 EMA and failed to even wick above them.
Currently those exponential moving averages are at approximately $0.13 – $0.15 and Dogecoin will need to break that resistance level if it isn’t to die and head back to test the $0.04 – $0.05 support levels from 2021.
The 2021 yearly open was as low as $0.0047 – an extra zero. Measured from there, Dogecoin has only retraced 87% of its bull run so far – the current 2022 low is $0.0689.
From January 2021 the DOGE price moved up 157x in total to its ATH – and from the 2020 open, it moved up 285x. crypto assets rarely make over 100x gains and then just keep going for months and years without some kind of long retracement and bear cycle first.
Ethereum, the second largest cryptocurrency by market capitalization with a lot more use cases and utility than a meme coin started partly as a joke, retraced 95% from around $1440 to $80 during the last crypto bear market – which lasted three years from early 2018 to late 2020.
So if Dogecoin is dead now it could stay dead for another two years. Between the Bitcoin ATH of $20k and the next time that level was broken was a span of 36 months – January 2018 to January 2021.
Dogecoin taking until May 2024 to breakout over 75 cents then wouldn’t be a surprise – some would even consider that optimistic as thousands of altcoins have died and never recovered, unlike Bitcoin and Ethereum which historically always recovered to set new highs.
Will Dogecoin Recover
Recently this week DOGE moved back into the top 10 list on Coinmarketcap, knocking DOT into 11th position to claim the #10 spot. It is possible Dogecoin establishes a short term uptrend and has a relief rally, until mean reversion back to the EMA 21 at $0.13.
The fact that Dogecoin still has a $10.8 billion market cap could be seen as bearish however – it still has a lot of room to drop in value, and it is harder for big caps to pump – it’s no longer the low market cap meme token it was at the start of the 2021 Dogecoin bull cycle.
Shiba Inu has now dropped to #16 with a market cap of $5.9 billion – once around $40 billion, a higher valuation than Deutsche Bank – and retraced 90% since its high.
The seemingly low price of Dogecoin – just 8 cents per coin – tricks some investors into holding all the way down. The tokenomics are more important – a crypto’s market cap and max supply. Altcoins can drop 90% in value, then 90% again, regardless of how cheap they are per token.
Search terms like ‘Will Dogecoin ever recover’ and ‘Will Dogecoin recover after SNL’ are still typed into Google hundreds of times per month, suggesting there are still many investors choosing to ‘hodl’ Dogecoin that have not yet capitulated and sold.
Some will have expected Dogecoin to hit $1 and beyond when Elon Musk went on SNL (Saturday Night Live) and been holding ever since then.
‘Should I buy Dogecoin now’ is also searched 1,300 times a month suggesting even potential investors still on the sidelines are not confident.
Comparing the Dogecoin price chart to the ‘Wall Street cheat sheet’ showing the psychology of a market cycle, we may only currently be at the anxiety, denial and panic stage for Dogecoin, and not yet the anger and depression phase that would mean Dogecoin has bottomed out.
The Dogecoin Reddit r/dogecoin is still very active with over two million subscribers and new threads being posted every ten minutes, with titles like ‘hope, trust, believe in Dogecoin’ and ‘going to the moon’ – that also suggests the Dogecoin bottom is not in yet and DOGE has room to drop further.
Can Dogecoin Hit $10
‘Does Dogecoin have a future’, ‘Will Dogecoin coin back’, ‘Can Dogecoin reach $10’ and ‘Is Dogecoin a good investment’ are also commonly searched.
DOGE at $10 would be over 100x times its current price – around 125x. That would mean a market cap of $1.35 trillion, which would flip Bitcoin and be more than the total crypto market cap (today $1.18 trillion) of every crypto coin put together.
No cryptocurrency has ever flipped Bitcoin, and if it does happen at a future date it would likely be Ethereum that flips BTC.
Will Dogecoin Go Down
Whether Dogecoin is dead, no one can say for sure, but it can still drop a lot lower and take years to ever return to its top.
Investors should adopt a dollar cost averaging (DCA) investing strategy, buying gradually to lower their average entry price and hope to beat the market that way.
A 95% correction from ATH would see the Dogecoin price at just under 4 cents, and a 99% correction would be $0.0074 – which is not even a retest of the 2021 yearly open.
Dogecoin could also double in value with a 100% pump back to $0.16, then retrace leaving that move as another wick above the EMA 8, and still die after that.
Nothing goes down in a straight line, so remember to take partial profits on the way up if you do invest in Dogecoin – and move your stoploss up to breakeven.
Also consider selling Dogecoin for an altcoin with a low market cap under $100 million – it may be easier to recover losses by rotating into another crypto project, rather than waiting for Dogecoin to come back to life again – as it already has a very high marketcap.
See our picks for the top meme coins here, the best of which is the newest meme coin on presale now, Tamadoge (TAMA).
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