Why is Dogecoin facing volatility?
Dogecoin is facing volatility as a cryptocurrency, but it can surge if the following points are considered.
Dogecoin is a cryptocurrency just like bitcoin, Ethereum, Tether, and others. However, it is less competitive than the others due to specific reasons. Although Dogecoin became a topic of many popular memes, it is considered the fifth-largest cryptocurrency by the market cap.
Dogecoin During the Past Few Months
Dogecoin has seen phenomenal progress during the past few months. This progress can be determined by its price, up approximately 5,600% since the beginning of the year 2021. Remarkably, Dogecoin has a significant shot up by more than 12,900%.
However, the type of progress and growth of Dogecoin remained comparatively unmatched, primarily Bitcoin increased by 37.0% and Ethereum, whose price has risen tremendously by around 251% since the start of 2021/. During May June 2021, Ethereum has faced a significant fall as it lost half of its value in just a few weeks as its prices sunk by around 45.0% since reaching their peak during May 2021.
Notably, fluctuation and volatility are considered normal phenomenon in the stock markets, and most of the investments are quickly receiver even after the fall of value. Still, the rates of cryptocurrency are an uncharted phenomenon. Now the question is whether Dogecoin will recover or the collapse remain constant? There are three essential things you should take under consideration:
Why Is Dogecoin Gushed but Declined?
First, it is essential to remember that, Dogecoin emerged a few months right after the growth of the cryptocurrency, and many investors took a particular interest in it. However, as compared to its competitors, investors artificially inflated its price to make quick money. Lacking the potential fundaments, Dogecoin does not have any utility. Yet, inexpensive investment in Dogecoin will help the investors to generate more profit once its price rises.
Unsustainable Price Surgence
Due to a lack of alignment with the fundamentals, Dogecoin does not have any sustainable growth. Due to this reason, we expect consistent volatility in the Dogecoin. Also, the lack of interest and investments in Dogecoin is another primary reason behind its volatility. However, the price of Dogecoin can bounce back if the investors and retailers start investing in it, indicating a possible rise in its value.
Need for a Competetive Advatange
Doge is weak and under less consideration as compared to its completes. For example, bitcoin and Ethereum due to their open-source blockchain technology. However, Dogecoin does not have any unique side to attract potential investors. In other words, Dogecoin lacks any competitive advantage/. Adding a competitive advantage can help to surge the Dogecoin’s value in the best possible manner.
According to Dogecoin, Dogecoin price today remained $0.242671 with a twenty-four trading volume of USD 894,914,477. It remained up 2.03% during the last 24 hours with the recent CoinMarketCap ranking #9. However, if you want to make investments in Dogecoin, you should keep the discussed risks under consideration. You cannot predict the future, so you have to remain cautious while making any investments in Dogecoin.