The Dogecoin price has been in a tight range in the past few days. DOGE is trading at $0.3153, which is 57% below its highest level in May and 55% above its lowest level last week. Dogecoin has a market capitalization of more than $41 billion and is the 7th biggest digital currency in the world, according to data compiled by CoinMarketCap.
An era of meme investing
Dogecoin has had a spectacular rally in the past few months. The currency jumped to an all-time high of $0.7500 early this month after Elon Musk’s Saturday Night Live (SNL) appearance. At its peak, the meme coin was up by more than 1,575% from March 1. Year-to-date, it has jumped by more than 3,100%, making it one of the best performing asset inthe world.
Much of Dogecoin’s success comes from the fact that Elon Musk, the second-richest man in the world has endorsed it. In his SNL appearance, he termed it as is hustle. Before his first tweet on the currency, Dogecoin was seeing no significant market action. Since then, the community of Dogecoin lovers, popularly known as Dogecoin Army has grown globally.
Dogecoin’s rise has coincided with the ongoing trend of meme investing. In the stock market, shares of companies like AMC, GameStop, Build-a-Bear, Virgin Galactic, Koss, and Express have jumped by more than 50% this week alone. This is despite the fact that the fundamentals of these companies are not all that good. For example, GameStop’s core business is dying as more people stream games online.
In the cryptocurrencies industry, cryptocurrencies like Shiba Inu have grown their market capitalization to more than $3 billion.
What does all this mean? In my view, we are living in one of the biggest bubbles in the world and memecoins like Dogecoin and Shiba Inu are part of it.
I know this statement will be controversial but hear me out. Who in the world knew of Dogecoin before Elon Musk’s tweets? In reality, no one, as evidenced by the worldwide Google Trends chart below.
Also, who uses Dogecoin for transactions? How many companies accept it? How comes a vast number of Dogecoins in circulation is held by a small number of people. Which institutional investors hold it?
Still, while Dogecoin is a bubble coin, I would not recommend shorting because we are living in a highly speculative period. So, what next for Dogecoin prices?
Dogecoin price prediction
The four-hour chart does not look good for Dogecoin. As we can see, the coin has formed a descending channel that is shown in purple. The upper part of this channel connects the highest swings in May. The coin is currently consolidating close to the upper side of this channel. The downward trend is aslo being supported by the 25-day and 50-day exponential moving averages.
Therefore, if we can’t find enough buyers to push it above $0.3455, there is a possibility that it will drop to the lower side of the channel at $0.2184, which is about 30% below the current level.