Dogecoin has been the favourite cryptocurrency of the Internet in recent months, with wild rises in its price. But things changed after peaking around the start of this month, and it’s been in freefall since. However, although small drops continue (including fairly sharply in the last few hours) prices are starting to look a little more stable now, and are still high compared to the period before April this year. So has Dogecoin stabilised again or will the wild ride continue?
Dogecoin rose to an all-time high of $0.74 in the first week of May (the Dogecoin price in India was Rs. 54.06 at the time) but it has been dipping over the last two weeks. The market crash has affected other cryptocurrencies too — for example, the Bitcoin price in India dropped to Rs. 25,34,271 earlier this week, compared to a high of Rs. 48,79,220 for Bitcoin in April. The Dogecoin valuation also dropped around 50 percent hitting bottom on May 23 at Rs. 21. Since then it has trended up a little and at the time of writing is just under Rs. 24.
The big question now on every investor’s mind is whether Dogecoin has stabilised? Dogecoin had gained 2.74 per cent in value from 24 hours ago and was trading at $0.34 internationally at the time of writing this report. After hitting the May 23 low, the CoinDesk chart for Dogecoin is relatively linear, suggesting it has not shown big volatility since then, except for one peak on May 25.
Whether the stability shown by Dogecoin over the past few days will last is very difficult to say, but its value has reached where it was before the bull run started in April. Tech billionaire Elon Musk is widely credited for fuelling the wild run of Dogecoin through his tweets. The Tesla and SpaceX CEO began tweeting about it in February when the meme currency was relatively unknown and everyone’s attention was focussed on Bitcoin, the world’s largest cryptocurrency.
Dogecoin is the people’s crypto
— Elon Musk (@elonmusk) February 4, 2021
Soon, Dogecoin surges by 50 per cent. And Musk has continued to rally investors behind Dogecoin since then, once saying he was in talks with the developers of the digital asset to improve “system transaction efficiency”.
Working with Doge devs to improve system transaction efficiency. Potentially promising.
— Elon Musk (@elonmusk) May 13, 2021
After the market crash last week, however, many investors have accused Musk of manipulating the cryptocurrency market with his social media commentary. Some currency bulls even formed a group to “stop Elon” from tweeting on the subject. The group has accused Musk of “trying to pump crypto for ages, tweeting about it to no end, and even going on Saturday Night Live as a last resort to get Dogecoin up! It’s ridiculous!”
Musk has said that he supports cryptocurrencies and they have the potential to become the future currency of the Earth. But for now, smart investors should remember that many of the cryptocurrencies that dropped in value during the 2018 crash never recovered past their all-time highs, and so “buying the dip” isn’t necessarily a winning strategy.