Experts spoke about the prospects of the “meme” cryptocurrency for the next year and assessed the likelihood of its return to historical highs in value
The Dogecoin cryptocurrency continues to gradually lose in price after it set an all-time high value above $0.7 in May last year. The altcoin is now trading at $0.17 (down 77% from its peak). And if just a year ago one humorous tweet of billionaire Elon Musk could inflate the price of a token by tens of percent, now it is reluctant to even react to major fundamental news.
For example, last week Tesla added the ability to pay for its accessories with Dogecoin. At the same time, the company emphasized that they only accept this altcoin and cannot receive any other cryptocurrencies. Against the background of the company’s announcement, the price rose by 10% to $0.21, after which it corrected.
Dogecoin is an exclusively speculative token, said Nikita Zuborev, senior analyst at Bestchange.ru. According to him, there are no fundamental reasons for the development of the community, with the exception of enthusiasts who support the coin for the sake of “hype”. DOGE does not play a role in the field of decentralized finance, NFT or any new technologies, and its blockchain and consensus mechanism are quite outdated and ineffective, the expert believes.
“The speculative asset class is very much subject to market influence – the fate of all “meme tokens” will depend on the trends of bitcoin and major altcoins. If bear pressure on the market intensifies in the coming weeks and there is a real risk of a “crypto winter” in 2022, then nothing positive should be expected from DOGE,” Zuborev warned.
From a technical point of view, Dogecoin is now very similar to the dynamics of bitcoin: the fall in May-July 2021 is structurally similar to the fall of BTC from the highs in 2018, and the current flat resembles the behavior of bitcoin in November 2018 before it fell to around $3,000, Viktor Pershikov, a leading analyst at 8848 Invest, added. He predicts that Dogecoin can expect another wave of declines in 2022, to $0.08, that is, another 53% from current levels.
Technologically, Dogecoin is developing, and its use as a means of payment is becoming more competitive compared to BTC, and especially LTC, Pershikov added. He noted that after a probable collapse, the asset will form a sideways trend for a long time, accumulate volumes, and develop an upward movement in the second half of this year. The expert suggested that the altcoin will update its historical high of $0.74 in 2023.
“I recommend betting on Dogecoin growth this year and buying the asset both at current levels and below, assuming the possibility of a price drop to $0.08-0.10. I expect the main growth in the second half of 2022, however, local price spikes of 10-20% against the background of news factors may well occur in the near future,” Pershikov said.
“Meme” tokens will have a chance to update all-time highs if the market situation stabilizes and the long-term trend changes direction, Zuborev added. He emphasized that as long as the token is supported by a large community and media personalities, it has good prospects. The number of Dogecoin fans continues to grow, while the eminent billionaire Elon Musk remains their undisputed leader of opinion, generating a lot of positive news stories around DOGE, the specialist concluded.
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