Should You Buy Dogecoin? Buying Dogecoin After It Hit Its Lowest
Dogecoin hits the lowest price in 2-month
- It’s in a huge correction from the $1 projections being made earlier in the year
- An investment in Dogecoin now could be a good investment given that it is still up by over 3000% in 2021
Dogecoin (DOGE) has been pretty bearish for some time now. In the last 24-hours, it is down by 1.55% and is now close to testing $0.22. This is a crash of more than 70.67%, from its highs of $0.75 way back in May.
While this may seem like a huge crash, it is quite negligible when compared to its prices earlier in the year. At the start of the year, Dogecoin was only trading at $0.005. Anyone who bought Dogecoin back then is still up by thousands of percentages.
Despite this price rally, the correction is quite significant. So significant that you are probably wondering whether it is tenable to buy DOGE now. To help you make an informed choice, let’s do a comprehensive analysis of Dogecoin.
Dogecoin rally: A case of easy money
On May 7th, Dogecoin entered the bear market. On that day, Dogecoin lost over 30% of its value. The trigger to this was the appearance of Elon Musk for an interview on the Saturday Night Live show. While commenting on Dogecoin, Musk said that Dogecoin was just a hustle. This hit the crypto hard and brought forth the huge influence he had over it.
Musk’s power over Dogecoin became even more apparent a few days after the Saturday Night Live show. He tweeted that he was working with the Dogecoin dev team to lower transaction costs on this blockchain. His tweet saw DOGE rally from $0.40 to $0.50 in less than 24-hours. This had two implications for Dogecoin. Firstly, it became clear that Social media heavily control dogecoin’s price. Secondly, it became apparent that it could react positively to news touching on its fundamentals.
Its potential to react to fundamentals is good because something huge could happen in the next 6 to 8 months. A while back, Space X, a company affiliated with Elon Musk, announced that it would be launching the DOGE-1 Lunar mission in Q2 of 2022. Moon missions are a big deal and will potentially have a huge impact on the price of Dogecoin in 2022.
Should You Buy Dogecoin Now?
Your risk appetite should drive the decision to invest or not invest in Dogecoin. That’s because this is an extremely volatile asset operating in an equally volatile market. For context, Dogecoin’s value appreciation has largely been driven by the social media activity of one individual. So you are basically betting that he will always tweet good things about DOGE.
That said, so far it has worked for a lot of people. People who invested anywhere between $1000 and $2000 in Dogecoin back in 2020 are already rich. Even those who came in, in the middle of the Dogecoin rally have become wealthy.
One of the more famous ones is Glauber Contessoto. In February this year, Contessoto put $250k in Doge when it was trading at $0.045. Less than two months later, he was a multi-millionaire. This goes to show that under the right circumstances, Dogecoin can make you insanely wealthy.
However, it would be naïve to ignore the fact that it is a highly volatile asset. Compared to most conventional assets, Dogecoin is very close to rolling the dice in a casino.
That said, Dogecoin is one of the most popular cryptocurrencies in the market today. It has enjoyed a lot of media attention that even crypto newbies are jumping into the Dogecoin train. The media attention that Dogecoin has enjoyed is quite strong and is not likely to go away anytime soon.
This will play a role in its price action going into the future. The social media hype around it is still intense too. If today a person like Elon Musk tweeted about Dogecoin, its price would most likely shoot up by a huge margin.
There is also the fact that at current prices, Dogecoin looks very attractive to those getting into the market now. Like most altcoins, Dogecoin is down by over 70% from its all-time highs. With Bitcoin finding strong support at $30k, Dogecoin and other altcoins that are more than 70% down from their all-time highs look very attractive. For crypto that was almost hitting one dollar just over two months ago, any price under $0.20 makes for a good entry point.
But it is not just the entry price that looks attractive, Dogecoin has already proven that it can rally by astronomical amounts. For context, it is still up by over 3000% in 2021 despite the huge correction. This makes it very attractive to investors chasing such mega gains again in the future.
However, besides the speculative aspect of it, Dogecoin is poised to get technically better. It started off as a joke coin, and for a long time, did not have an active developer team working on the network. However, this is about to change. Since Elon Musk made it his favourite crypto, and the price rallied, the Dogecoin developer team is back.
They recently tweeted that they were working on cutting down on Dogecoin’s transaction fees. This could add to its adoption by investors speculating on its adoption going into the future.
Dogecoin’s growing adoption also makes it pretty popular right now. Since its parabolic rise earlier in the year, Dogecoin has seen a couple of large corporations adopting it. A while back, a Portuguese real estate company announced that it would be accepting Dogecoin for payments. However, the biggest adoption move that could trigger a DOGE rally is Tesla.
That said, all this is highly speculative. As such, it is prudent to stick to the old adage of investing only what you can afford to lose.
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