Dogecoin, which began as a meme and largely a spoof of bitcoin and other cryptoassets has ballooned into a $250 million dollar enterprise. Various cryptocurrency analysts are still doing Dogecoin price predictions on a regular basis and using technical analysis to try and foresee where the cryptocurrency's price is headed.
However, as the industry for cryptocurrency moves into a more mature phase, is DOGE in danger of being left behind?
The Internet's Meme Coin
Dogecoin (DOGE) derives its name from the popular internet meme featuring the Shiba Inu dog, which has historically been used to demonstrate a silly or absent-thought state. DOGE was first introduced in December 2013 as a joke cryptocurrency by developers Billy Markus and Jackson Palmer.
However, through a combination of community building and the generally random nature of the internet, DOGE was able to catch on with investors, establishing a market capitalization of $60 million by January 2014. Its rise at one point saw Tesla CEO Elon Musk say the cryptocurrency is "pretty cool."
Compared to bitcoin, which has a hard cap set at 21 million BTC, DOGE is a high supply/low priced token that also relies on mining. The initial coin production for DOGE was greatly accelerated, with 100 billion coins put into circulation by 2015. The current market supply is over 121 billion DOGE, with no definitive max supply established for the cryptocurrency.
Nonetheless, the price for dogecoin has managed to climb over the years, despite the asset being regularly portrayed as a joke. While DOGE is currently valued $0.002, the token reached an all-time high of $0.0187 on January 7, 2018, establishing a market capitalization of over $2 billion, against most initial Dogecoin price predictions. The price gain followed the overhyped market for cryptocurrency at the time, which led to a crashing price for DOGE and altcoins throughout the rest of 2018.
Given its previous performance, some investors look at DOGE as a potential value investment. For one, the coin has established a long history in the sphere of cryptocurrency, having been around since 2013. Investors are familiar with DOGE -- for better or worse -- which makes its price movements magnified against the rest of the altcoin marketplace.
I'm very pro-Dogecoin.— Vitalik Non-giver of Ether (@VitalikButerin) July 4, 2019
Increased recognition, in addition to its fun, tongue-in-cheek nature, has largely been the catalyst for cycles of boom and bust pricing. In April, DOGE jumped more than 75% in value, riding the wave of investment interest flooding back into the crypto-markets. Since then hundreds of different Dogecoin price predictions have been made.
DOGE/USD 12 month pricing | Source: CryptoCompare
DOGE currently lacks a stable development team, and has had no technical updates in nearly half a decade. Founder Jackson Palmer left the project in 2015, citing a “toxic community” that was only concerned with pumping the price of the coin and misleading other investors. Palmer pleaded with dogecoin users to remember the coin’s fun and playful roots, as opposed to using it for a potential get rich quick scheme.
In addition, DOGE has no maximum supply, meaning that the currency is inflationary compared to assets like bitcoin which are largely deflationary. While many other altcoins implement an inflationary protocol, few have the massive circulating supply of DOGE which is already well over 100 billion. In short, there is a lot of dogecoin on the market, which could either lead to stagnation or price depression from whale-like holders.
Analysts Weigh In
Coinhahsreports, has published a Dogecoin price prediction which claims the coin will rise to around $0.007 by the end of 2019.
According to their prediction, DOGE will leverage growing adoption as a means of payment,
It is the right time to initiate fresh investments in Dogecoin as the trend is expected to be bullish and fetch great results later. DOGE has improved in terms of credibility and valuation of the coin in the market. However, it is expected that Dogecoin may trade around $0.007 by the end of the year.
A cryptocurrenc blogger on the other hand claims that DOGE doesn't have the potential to climb into one of the top spots in the cryptocurrency space. The blogger predicted this year will see sideways action for bitcoin - a prediction that has so far failed - and as such dogecoin won't see the price appretiation some would like. He worte:
Dogecoin, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, Dogecoin can hope for one as well. Since that is very unlikely, don’t expect much to change for Dogecoin price-wise in this year
Other DOGE analysts are more optimistic, saying that currency has the potential to reach more than $1 in the coming years. These predictions, such as the one by former Steemit blogger and crypto analyst Zakaria M., believe that the market will recognize dogecoin as a superior form of payment to fiat, driving adoption.
What the Charts Say
Dogecoin is certainly one of the most beloved altcoins amongst crypto veterans, having been around almost as long as internet memes themselves (okay, not that long). In all that time, DOGE never quite goes out of fashion for crypto traders. And having been around so long, it has quite an extensive price history to go off of.
Starting with the weekly chart, we see that DOGE has had a lengthy period of correction since April, and is now retraced to near the bottom of its multi-year chart. Assuming DOGE doesn’t go to zero, which is a decent bet, this presents an inherently, pretty good rate of return trade opportunity -- against Bitcoin at least.
It’s pretty easy to see that DOGE’s preferred method of price action is the out-of-nowhere explosion method. Plenty of Dogecoin trading is probably speculation surrounding this possibility, because it has happened so many times before. And the last time there was a really gigantic DOGE pump, Bitcoin dominance was slightly lower than it is now (see bottom pane).
Going to the daily chart, we see that DOGE is actually signalling a possible breakout. The memecoin has taken the 21 and 55 exponential moving averages (EMAs) and closed above them both. Volume is building somewhat, although not much, and the histogram is arcing up vigorously.
If DOGE were to close in this aspect, at 30 sats, and with higher-high histogram and RSI, the altcoin could see some pretty decent gains.
Looking on the USD pairing, however, we get a slightly different story. The general behavior is similar, with drastic price rises that come out of nowhere. But here, Dogecoin is not placed at the bottom of a convenient range.
Rather, it looks to be in the middle of the range of a massive falling wedge pattern. DOGE could do well on DOGE/BTC, but if Bitcoin decides to continue heading down after its important breakdown last week, Dogecoin may have trouble getting traction here.
Generally, we should probably not assume that the monster-ultra pump of January 2018 will ever come again -- and if it does, that time is probably not near. The context of January 2018 was of a massive surge in interest in crypto, and in the cryptoasset markets. The atmosphere in crypto now is much different, and we must keep this in view when looking at Dogecoin’s astonishing charts.
Dogecoin Price Analysis
DOGE’s price and any potential price predictions potential should largely be driven by three factors.
The first is brand recognition. As mentioned above, dogecoin has been on the market a long time and still manages to garner the endearment of investors by being the meme cryptocurrency. However, that goodwill could dry up as the market matures.
In addition, DOGE has the potential to undergo more price pumps with the rising tide of the crypto marketplace. As evidenced by DOGE’s double-digit gains in April, investors are still adding value to the meme currency when the price of bitcoin rises, which could make its current price point highly undervalued in a year’s time.
Finally, dogecoin, like all cryptocurrency projects, could become resurrected by a dedicated development team. Even in the absence of its founders, the decentralized network for DOGE could be further developed, which could ultimately lead to more adoption.
However, investors should remain cautious with the asset. Without focused development or a team to drive adoption, the price of DOGE is largely at the whim of the broader market for crypto, barring a pump and dump scheme or another form of market manipulation. Keep in mind Dogecoin price predicitons that claim the currency will rise to $1 should bear in mind it would require a market capitalization of $121 billion, which is close to the current total valuation for bitcoin.
Disclaimer: Investing in cryptocurrency is an inherently risky endeavor.
Featured Image Credit: Photo via Pixabay.com