DogeCoin Suffered Losses and it Fell from An All-Time High

DogeCoin declined on April 20 after hitting an all-time high in a wild session that saw supporters of the cryptocurrency to fule a rally until it lost steam. This cryptocurrency ultimately dropped 14.5% to $0.33. However, during the session when it reached its best result, DogeCoin’s market capitalization jumped to more than $50 billion. The price of DogeCoin increased by 8,000% this year. After the slump, meme-based cryptocurrency’s market cap dropped to roughly $45 billion. By comparison, the market cap of the world’s largest cryptocurrency, bitcoin is more than $1 trillion.

It was launched as a satirical critique of 2013’s cryptocurrency frenzy. Its logo features a Shiba Inu dog at the center of the meme. Users have the opportunity to trade DogeCoin on crypto exchanges as well as on more popular mainstream trading apps.

DogeCoin managed to overtake cryptocurrencies like Litecoin as well as for a short period of time it even surpassed Tether, to become the sixth-largest cryptocurrency. The current retail fervor won’t probably completely give up on this cryptocurrency. Nevertheless, there is a high chance of “sell the event reaction” for DogeCoin.

DogeCoin and retail investors

DogeCoin gained popularity among a new generation of retail investors for whom memes are a native language. Its rise came during a surge in online trading of stocks and crypto by retail investors. DogeCoin has not seen much growth in usage for payments or in commerce.

The popularity of online trading apps like Robinhood also fueled the social-media-driven rally in GameStop Corp stock in 2021. That rally pitted retail investors against the hedge funds.

In the case of DogeCoin, it is an extension of the same phenomenon that led Tesla stock to be valued well beyond fundamentals and more recently to the GameStop short squeeze.

Like other cryptocurrencies, the price of DogeCoin is heavily influenced by social media users including Elon Mask. His tweets regarding this cryptocurrency in February sent its price soaring over 60%.

At the moment, DogeCoin has a 16.7% implied probability to be worth more than $1 at the end of 2021. This is a serious improvement from earlier this month when it had a 2.9% chance to reach more than $1.

DogeCoin’s price also fell on Wednesday morning as it was down 22% to $0.3248 in London. According to Capital.com which is a retail trading platform, meme-based cryptocurrency has been its most popular cryptocurrency since April 14. Other platforms also reported similar spikes in interest.