The Dogecoin price was not spared by the ongoing cryptocurrency sell-off. DOGE is trading at $0.4120, which is 45% below its all-time high of $0.7410. The meme coin has a market capitalization of more than $52 billion, which is lower than its peak of $83 billion.
Dogecoin is struggling after Elon Musk said that Tesla will not continue accepting Bitcoin because of its environmental factors. In my earlier article, I criticized this move as being hypocritical since Tesla cars are powered by coal.
The currency is also in the spotlight after most of Elon Musk’s followers supported the idea for Tesla to start accepting Dogecoin. In a Twitter poll, 84% of the respondents loved the idea. Indeed, #Doge4Tesla was trending on Twitter today.
However, in reality, I don’t think that Tesla will start accepting Dogecoin. First, like Bitcoin, Dogecoin is based on the proof-of-work methodology. This means that it is mined using computers. As a result, its energy consumption will keep rising as the demand rising.
Second, Dogecoin is a relatively volatile cryptocurrency that not many companies accept. This is in contrast to Bitcoin, which is still accepted by thousands of companies globally. BTC has also gained institutional adoption, which is required for a currency to become popular.
Third, the Dogecoin ownership structure makes it highly risky. For one, as I wrote before, 1 wallet holds Dogecoin worth more than $37 billion. This means that a single individual or group owns more than 50% of all coins in circulation. And it gets worse, as shown below, the top 11 addresses own DOGE worth billions of dollars.
Fourth, while Elon Musk has advocated for Dogecoin for a while, there is no evidence that he owns any of it. So, what next for Dogecoin prices. Finally, by walking away from Bitcoin, Musk established himself as a bad evangelist for digital currencies because he already knew of its environmental impacts before he started to accept it.
Dogecoin Price Prediction
The four-hour chart shows that the Dogecoin price has continued to drop even after Musk mulled accepting it. This is further evidence that investors don’t believe that the company will start accepting it. The chart shows that the price has moved below the lower line of the ascending channel.
It also remains below the short and longer-term moving averages. The currency has also formed what seems like a double-top pattern. Therefore, as inflation rises and as Musk loses credibility, I suspect that it will keep falling as I predicted earlier this week.