Today, the crypto market is up, and bitcoin (BTC) has broken above $7300. However, one major crypto that is not performing so well today is Dogecoin (DOGE). It’s down by close to 16% after a series of gains in the last few days. Does this mean that it’s time to exit and run for the hills?
Well, what Dogecoin (DOGE) is having today is just a market correction, after a series of gains that saw it gain by over 50%. Naturally, as with every other market, Dogecoin was bound to retrace. Such retracements in bullish assets are usually driven by profit-taking. After making more than 50% on their money in less than 48 hours, it’s only natural that investors would want to take some profits. Besides, it’s on a weekend, so such profit taking could be driven by the need to have fun, after a week of heavy trading. The same thing happens in the stock markets and all other financial markets.
The best thing is that such retracements in price usually give an asset the impetus to make even further gains, for two reasons. The first one is that it draws in new money that was sitting on the sidelines, after missing on the initial price pump. In the case of Dogecoin (DOGE), the recent jump in price caught most investors flat-footed. Such investors, especially those with a slight idea of how financial markets work would be waiting on the sidelines to jump in. As such, a retracement of 10 -20% offers the perfect opportunity for new money to come in, after its recent string of gains. The entry of new money could see Dogecoin start the new week on a high note, with an even bigger demand level, and a price push higher than last week’s high.
Secondly, given that there is an increased sense of bullishness in the whole market at this point, those who took profits at yesterday’s high have an incentive to get back in and make more gains. This makes Dogecoin one of the best potential gainers going into next week.
Besides, Dogecoin already has strong fundamentals supporting it. The fact that it works extremely well in transferring value on the internet, makes it a prime candidate for adoption by merchants, especially online retailers. This means that its price rise is not just anchored on market speculation, but on fundamentals as well. It’s without a doubt one of the cryptos to watch next week. A break back above $0.005 is highly probable.