Even though Dogecoin has obtained a place among the highest-ranked cryptocurrencies, there is still an ongoing debate regarding whether this meme coin represents a legitimate cryptocurrency or just a witty way of jibing at the power brokers of this world, like the over-leveraged hedge funds from Wall Street.
In fact, DOGE has been in opposition to the movers and shakers of the financial world, but also to the Bitcoin community; and it’s been perceived that way since its very inception in December 2013. Back in the early days of crypto, the Bitcoin community consisted mostly of the adepts of the Austrian school of economics who were constantly ruminating about the significance of BTC and how it’s going to disrupt the modern financial system, which was considered as a snobbish and lame approach to the greatest invention of this decade by those played around with DOGE, mining it on their home computers and tipping the contributors on Reddit and other social media platforms.
To many, Dogecoin was an amusing instrument for funding the initiatives that they deemed eccentric and funny. For instance, in 2014, this community had raised $25,000 to help the Jamaican bobsleigh team get to the Winter Olympics in Sochi.
Back then, Dogecoin was the embodiment of a subculture that took everything with a grain of humor and opposed itself to the "boring" Bitcoin proponents. That community had also supported noble activities like donating around $50,000 in DOGE to help resolve the water crisis in Kenya.
However, a lot has changed in seven years: the original team of developers had left the project, only to resurface when the price of DOGE was skyrocketing to whinge about selling all holdings for a price of a used car; the initial community had dissolved and got replaced by tiktokers, profiteers who were ceaselessly shilling for this coin across all social media platforms to the point annoyance. And for quite a while, Dogecoin has been put on the backburner while its price had persistently moved in a horizontal thread-like chart, barely ever leaving the $0.003 zone. That was before Elon Musk, a business tycoon whose net worth constitutes a mind-blowing $167,5 billion, literally hacked this community and became the self-proclaimed Dogefather.
In this article, we won’t reiterate the impact that Musk has on DOGE through Twitter, you can read about that in one of our previously published articles, but it’s truly fascinating how one man’s opinion can push the market to such great heights. At the same time, Musk’s intrusion into this niche community had put DOGE back into the limelight and provided an incentive for this entire concept of parody coin to reinvigorate and attract new developers who allegedly intend to revamp the network and put it to good use. And that network really needs a lot of work to be put into because the last update there dates back to November 2019, when the team had introduced the Dogecoin Core v.1.14.2 update, upon which the development of the entire project had been put on hold indefinitely.
Right now, there is basically only one legitimate use case for DOGE, with it being nothing more than a relatively effective medium of exchange. Even now, with its rather buggy system, the transactions in the DOGE network are far cheaper and faster than those executed on the Bitcoin network.
Nevertheless, Dogecoin is fundamentally less sound than many proof-of-stake networks, which puts its survivability into question because, frankly, there are no other use cases for it, except for it being a point of attraction for the youngest generation of crypto investors, most of whom haven’t even reached the legal drinking age, who were raised on this whole Internet meme culture. Unlike Bitcoin, the meme coin can’t be regarded as a store of value, mostly because of its questionable tokenomics that provides for a literally infinite supply of these coins, which makes its inflation schedule a really serious issue.
Let’s take a look at the ongoing development on the Dogecoin market from the perspective of technical analysis. Perhaps there is no need to reiterate the fact that the price fluctuations of DOGE are driven almost purely by the hype created by Elon Musk and a bunch of other celebrities and social media influencers, which makes its price prone to huge swings in both bullish and bearish directions that can’t be forecasted on the basis of fundamental analysis alone.
1-week DOGE/USDT chart. Source: Tradingview
The weekly chart above reveals that DOGE had suffered an enormous 78% drawdown from its all-time high at $0.74, which took it all the way to the current position at $0.24. Consequently, the crash had almost wiped out all those gains that social media had been buzzing about during the rally, ultimately leaving crowds of gullible investors who got caught up in the hype and FOMO holding the bags in hopes of the promised rally to $1.
But despite the fact that this bubble had finally popped, Dogecoin actually doesn’t look all that bad on the charts. Unlike the overwhelming majority of other altcoins, DOGE managed to stay above both 50-period and 100-period moving averages, which is considered a sign of strength even in these dire circumstances. There has been tremendous support from buyers at the $0.16 level, which allowed the price to rally to the current price level that coincides with the macro support that formed during the last bull run to the ATH.
Moreover, we see that the Momentum indicator is already deep in the oversold area, which hints at the possibility that the sellers would soon lose their grip on that market, which might lead to a swift rise to the long-standing resistance level at $0.4, with which the price had actively interacted during the previous two mega rallies. However, we also see that the MACD indicator is turning bearish as the MACD line has already crossed the signal one to the downside and posted the first red histogram in months.
Therefore, we can’t rule out the possibility of DOGE being dragged back to $0.16, or even below that level, in the coming weeks, especially since Bitcoin miners have been selling off their holdings to fund the move to other countries after the infamous crackdown on their activities in China.
Also, let’s not forget the fact that Dogecoin has always had rather unorthodox behavioral patterns in terms of price action, meaning that it could begin to consolidate in a very narrow range for an extended period of time before traders see any comprehensive price action.
1-day DOGE/USDT chart
Moving on to the daily time frame, we see that after a brisk 80% rally that was preceded by an equally large dump, DOGE is now being forced back to the structure-defining 200-period moving average on the backdrop of bearish momentum as MACD remains buried deep in the sellers’ territory. Add to that a considerable selling volume that was registered in the last two days, and we get a bearish setup in which the price is likely to be pulled back to $0.2 to retest the 200 MA.
However, if the bullish scenario is to pan out, the price could easily rally to the 50 MA that flows near the $0.3 price level or even try to test the $0.33 level where the largest trading volume from the past couple of weeks had occurred, as suggested by the Visible Range indicator that usually serves well at pointing out the potential levels of support and resistance. In any case, despite what the nagging promo campaigns on social media might say, Dogecoin doesn’t have enough prerequisites for a strong rally in the near future, unless Elon Musks gets back to hyping people up, but we can’t possibly predict that because the mind of a billionaire is always a mystery. A couple of memes from Dogefather, and we could see the price explode to $0.45 or above. Therefore, if you seriously consider investing in DOGE, it would be better to start following Musk on Twitter, along with subreddits like r/SatoshiStreetBets. And although we, and other serious investors, usually frown upon such an approach to wealth acquisition, the reality dictates its own rules. The hype that drives the price of Dogecoin is usually born there, so it’s only logical to keep the ear to the ground in anticipation of another tremendous rally.
When entertaining the possibility of DOGE going to $1, something that the whole community of meme lovers, as well as celebrities like Snoop Dogg and Mark Cuban, aspire to, we have to take into account the real factors that drive the price of Dogecoin and any other cryptocurrency for that matter.
First of all, the investor has to consider tokenomics, the subject that we have already touched upon. But tokenomics implies not only coin’s use cases and technological aspects; it also has a lot to do with the outstanding market capitalization relative to the price of the coin in question. The current market capitalization of Dogecoin stands at $31 billion while its price had cascaded down to $0.24 as of the time of writing. And even after the recent collapse, the capitalization of DOGE remains larger than that of far more technologically advanced cryptocurrencies, such as XRP (XRP) with its payment system that is being adopted by many banks, Polkadot (DOT) that offers a unique blockchain interoperability solution, and Uniswap (UNI) which is one of the leaders of the entire decentralized finance (DeFi) sector. A quick math exercise will reveal that in order for DOGE to reach the valuation at $1, its market capitalization has to soar to $129 billion. And even though we do love the concept of meme coins and how they are capable of defying the very perception of value, let’s be honest, the possibility of DOGE hitting such an astronomical market capitalization is totally unfounded, given the poor state of its ecosystem and a lack of viable use cases, apart from being a cheap payment vehicle.
Besides, we need to consider the fact that the inflation rate of Dogecoin amounts to 4%, which is a lot for a cryptocurrency whose adepts claim that it would eventually take over the world. Compare that to the inflation rate of Bitcoin that currently stands at 1.76% - the difference is staggering. Such a high inflation rate in conjunction with an infinite supply could put a significant strain on its price in the long run.
Moreover, a deeper analysis revealed that DOGE is actually a considerably centralized cryptocurrency in terms of the distribution of coins, not its technical build. According to our findings, the largest wallets hold over 75% of the coin’s circulating supply of 130,19 billion DOGE. To make matters worse, the “fattest” Dogecoin wallet holds 28.42% of that supply or 36,7 billion coins. Obviously, no one knows who owns that wallet: it’s not the founders because, as already mentioned, they had dumped their DOGE holdings years ago for peanuts. This giant whale might well be Elon Musk, but that really doesn’t matter because it doesn’t require an in-depth knowledge of trading intricacies to understand that one day, this anonymous holder could easily dump this huge bag of coins on the market that would obviously cause a catastrophic drop in the price of the said digital asset. Elon Musk, however, had recognized the danger of this type of centralization in his tweets from February 14 - 15, where he promised Dogecoin its full support if major DOGE holders void their accounts.
But despite all these constraining factors, there is still a significant chance of DOGE hitting the $1 mark simply because financial markets, the cryptocurrency one, in particular, can stay very irrational for a protracted period of time, even months and years, depending on the maturity of the market. Basically, all that Dogecoin needs to reach that psychological zone is for the hype to be maintained around it at least until the end of the calendar year. Obviously, there wouldn’t be any problem with that, given how driven is the current Dogecoin community headed by Elon Musk himself by the very idea of reaching that aspirational goal, even though the rationality behind it is doubtful. And given that DOGE has recently been listed on Coinbase, the largest cryptocurrency exchange in the United States, which harbors one of the largest crypto user bases in the world, the demand for the meme coin will definitely keep its rising curve.
Certainly, the potential rise of DOGE to $1 has been put to a halt by the recent market crisis, but as it often happens in this space, the turnaround could be as fast and dramatic as the downfall. It’s still too early to tell whether we are in a full-fledged bear market, or the huge drawdown, which we have witnessed in the past several weeks, is just a huge bump in the road to new all-time highs across the board.
But while we analyze and forecast the price of Dogecoin for the near future, it’s up to our proprietary algorithm that incorporates the Cryptocurrency Volatility Index (CVIX) to determine the price of the digital asset in question in a much more distant period of time - 5 and even 10 years.
We have already established that in the next few months, DOGE is going to be gridlocked in the (hopefully) temporary bear market while its price is likely to struggle in overcoming the resistance at $0.4 - $0.43. Given that we won’t see the crypto winter 2.0 emerge after the latest crash, DOGE is likely to consolidate around that area for a while.
However, the cryptocurrency market never stays at one place for too long, which also applies to Dogecoin, though this cryptocurrency does like to consolidate for a protracted period of time. Once the miners move their business wherever the electricity prices are lower, and the crypto regulations are more relaxed, and this whole ordeal with China will blow over, we would definitely see more episodes of bullish action. In this regard, the algorithm predicts that in no more than twelve months, Dogecoin will once again regain the level at $0.69 that was the peak of the first stage of the bull market. A move to that area would constitute a 178.55% increase, as the algorithm suggests. The attainment of that target won’t constitute much of a problem for DOGE since the reinstatement of the bull market, or at least the cancelation of the bearish scenario, will reignite the hype around that coin, generated by all sorts of social media outlets and influencers. We might even see a couple of pump-and-dumps along the way, so be prepared to catch one of those tidal waves to the upside.
In two years, DOGE is likely to finally overcome that much talked about psychological area at $1 and establish a strong foothold above it. The algorithm forecasts a 456% price appreciation that would land Dogecoin right around the $1.38 territory. But be prepared that when the price encounters the barrier at $1, it might go into a correction mode since there would be literally hordes of cryptocurrency traders and investors who would eagerly dump their entire holdings at that price level. Judging from the analysis of the current level 2 (the order book), there are millions USD worth of sell orders placed in the zone between $0.94 - $1. Given the inherent volatility of DOGE, there is a distinct possibility that after a brief interaction with the $1 resistance, the price would collapse by no less than 30% or even 40%, so make sure not to get caught up in that correction if your goal is to make money trading DOGE, instead of holding it just for laughs.
Another thing that could benefit the rise of Dogecoin to the said levels comes from none other than Elon Musk, who appears to have found an amusing application for this coin. At the beginning of May, Musk announced that his rocket company SpaceX would literally take DOGE to the moon. Back then, he revealed - after slamming Dogecoin on a TV show by calling it a “hustle,” which caused its price to start tanking - that SpaceX had struck a partnership deal with Geometric Energy Corporation (GEC), a Canadian firm that provides architectures and solutions for renewable energy, space exploration, blockchain, and cybersecurity, that will see the launch of a space mission funded in Dogecoin, ultimately making it the “1st meme in space” as Musk had phrased it in the Twitter post. The GEC’s Vice President, Tom Ochinero, noted that “this mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce.” And although it sounds fairly ridiculous, it might well become the use case for DOGE, because as Musk said it, “Fate loves irony.” What started out as a joke might end up being the first currency accepted in space. In that case, there is absolutely no doubt that DOGE would travel to $1 and far beyond.
Besides, when Tesla has had a partial breakup with Bitcoin due to environmental concerns, Musk noted that the corporation would look for other - clearer - payment options for its iconic electric cars. And since Dogecoin hasn’t been involved in any carbon footprint controversy, it would come as no surprise if Tesla adopts it, which would ultimately provide a huge boost for the price. Moreover, the Dogecoin developers have recently confirmed that Elon Musk has been cooperating with this organization since 2019 in preparation for a major technical upgrade.
The said upgrade, dubbed Doge 1.21, would allegedly expedite the synchronization speed and improve wallet backups, as well as blockchain integration. There is obviously a lot more to be done in that area for DOGE to become a technologically sound cryptocurrency, but it comes to show that the fundamentals are being improved, and given the support of the richest (or the second richest) man on the planet, the Dogecoin network could become as robust as it should be for a coin with a market capitalization of over $32 billion.
If Dogecoin is to become a more technology-based coin instead of being the hype-infused rocket that it’s now, the sky would be the limit for it. The algorithm predicts that in 3 years, DOGE would fly past the $2 territory and land at $2,76, a 1000% from its current standings. But apparently, the coin would see a serious price appreciation in the next two years after conquering $2. In 5 years, DOGE is likely to be sitting above $10, most likely at around $11, as the algo forecasts, that would come as the result of another 4000% price bump. It’s tough to say where Dogecoin would find itself in 10 years because the world as we know it might change drastically in such a long time, but if the team behind the coin, along with Elon Musk and other meme enthusiasts, put a lot of effort in the improvement of its fundamentals, DOGE might well end up being valued at around $100, especially if it keeps being the point of attraction for the young generation of investors.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||Volume 24h|
|1||BTC||Bitcoin predictions||78.8%||36||$42 692.93||-2.10%||-1.96%||$803 819 282 603||$30 748 553 485|
|2||ETH||Ethereum predictions||73.2%||51||$2 955.85||-4.21%||-2.12%||$347 903 077 176||$19 101 897 139|
|3||ADA||Cardano predictions||63.2%||75||$2.16||-4.60%||4.25%||$69 295 841 075||$3 084 135 333|
|4||USDT||Tether predictions||92.8%||1||$1.000474||-0.01%||0.05%||$68 575 451 500||$70 240 814 218|
|5||BNB||Binance Coin predictions||65.2%||65||$337.66||-3.90%||-7.26%||$56 773 744 460||$1 538 043 078|
|6||XRP||XRP predictions||72.8%||49||$0.924905||-2.55%||0.68%||$43 209 372 694||$2 970 626 231|
|7||SOL||Solana predictions||67.6%||66||$138.70||0.05%||0.31%||$41 252 366 694||$2 837 656 739|
|8||USDC||USD Coin predictions||95.2%||1||$1.000334||0.01%||-0.01%||$31 130 094 542||$3 148 284 594|
|9||DOT||Polkadot predictions||68.8%||69||$27.73||-5.72%||-2.87%||$27 388 621 521||$1 694 336 627|
|10||DOGE||Dogecoin predictions||66.8%||70||$0.200964||-3.44%||-4.38%||$26 418 834 354||$858 880 050|
|11||LUNA||Terra predictions||68%||60||$37.85||6.16%||36.72%||$15 139 928 160||$1 669 613 943|
|12||AVAX||Avalanche predictions||60.4%||84||$67.15||-0.78%||13.01%||$14 791 554 871||$1 240 824 478|
|13||UNI||UniSwap predictions||67.6%||70||$22.37||-7.77%||5.86%||$13 679 594 706||$1 145 133 068|
|14||BUSD||Binance USD predictions||94.8%||1||$1.000184||0%||0.01%||$13 517 674 906||$5 035 296 123|
|15||LINK||Chainlink predictions||64.8%||70||$23.21||-6.39%||-2.06%||$10 559 720 262||$1 106 271 150|
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