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In the world of cryptocurrencies, Dogecoin is getting a lot of attention in addition to Bitcoin. The old fun currency has strengthened in recent weeks thanks to outstanding support and has set new records. However, the price of the cyber currency has fallen significantly again. Have the bears now taken over Dogecoin?
• Dogecoin has made a significant comeback after the last record high
• Elon musk and Bitcoin as the main factors influencing the course of Dogecoin
• The strength of the recent price drop coincides with the definition of a bear market
The Dogecoin has been on a real roller coaster ride in recent weeks. While cyber currency at the turn of the year according to “CoinDesk” only cost 0.0053885 US dollars, now it is 0.057271 US dollars. It has achieved an incredible price increase of almost 960 percent since the beginning of the year (as of February 19, 2021). But in the meantime, it rose even higher: On February 8, Dogecoin hit a record high of $ 0.086.
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The recovery of the cryptocurrency was driven on the one hand by Reddit users, who agreed to shop 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, the cryptocurrency has dropped significantly again, and Musk is not entirely innocent of that either. Last Monday, he caused the price of Dogecoin to drop by more than 13 percent by saying on Twitter that he would support it if the large Dogecoin owners sold most of their coins. In another tweet, he even completed it again, stating that he would even pay these Dogecoin holders real US dollars if they closed their accounts.
I will literally pay real $ if they cancel your 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 own about 50 percent of all Dogecoins, they sold some of their cryptocurrencies, but also many small investors for uncertainty the Hope for monetary gifts from Elon Musk – they have parted ways with their doggy coins.
Dogecoin im Bärengebiet?
With prices falling at the beginning of the week, Dogecoin is now around 33 percent below its recently marked all-time high (as of Feb.19, 2021), and technically meets the criteria of a bear market. You talk about something like this when an asset returns from its most recent highs by 20 percent or more. Another hallmark of a bear market is also negative investor sentiment, which may well have triggered the latest tweets from Elon Musk. Paradoxically, the Bitcoin records also suggest that investors may now have a more negative attitude towards Dogecoin. Because when the largest cryptocurrency rises significantly, cryptocurrency investors often turn away from altcoins and turn towards bitcoin. This also fits in with the fact that according to “MarketWatch” Dogecoin was already around 20 percent below its all-time high on Sunday a week ago, that is, the day of a new Bitcoin record and the day before Musk’s tweets, and according to “CoinTelegraph” other Altcoins have also lost 20 percent or more of their value since Bitcoin’s new record.
But another characteristic of a bear market is usually that the fall in prices continues quite continuously over a longer period of time, that is, several weeks or even months. If the price drop lasts only a few days, it is generally spoken of a correction, no matter how much it goes down. Consequently, it is currently too early to speak of a bear market for Dogecoin, especially as the cybercurrency had to deal with an even harsher setback in January and rebounded without a hitch. Because at the end of January the course of Dogecoin fell according to “CoinDesk” by almost 70 percent from around 0.078 US dollars to 0.024 US dollars. After that, however, it soon climbed back to the new record on February 8. Therefore, the price loss was short-lived and did not usher in a bear market, even if its size had been sufficient. Currently, the downtrend in Dogecoin is more continuous and long-lasting than in January, but there should be no talk of a bear market at this time.
Reddit users probably haven’t ruled out Dogecoin yet
On Reddit, opinions on the Dogecoin sub-forum are divided as to whether Dogecoin is in a bear market or just a correction. In the additional sub-forum “SatoshiStreetBets”, through which users have agreed to buy crypto together, the belief in Dogecoin still prevails. “Don’t panic, all is well #dogecoin,” writes one user referring to Elon Musk’s latest tweets noting that a less strong concentration of Dogecoins on individual owners is ultimately a good thing and cryptocurrency helps in the long run. . you got it. According to “MarketWatch”, some forum users still hope to bring the Dogecoin to $ 1.00.
However, experts are still critical of the old Spasscoin as it has no real use compared to other cryptos. For example, Nic Carter, a venture capitalist in the cryptocurrency sector, told CNBC that average investors could be hurt if they speculatively gamble on an asset for no real purpose. Carter also criticized Elon Musk and his tweets: “It’s somehow strange to see Elon Musk being so excited about that,” the expert said. Even if Dogecoin is not currently in a bear market for sure, it can’t hurt investors to be on guard.
Editors of Finanzen.ch
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