Why is Dogecoin plummeting today?
Dogecoin price is tanking in Sunday trading. The cryptocurrency is down 5,7% from the previous 24-hour period at 11:45 am ET.
With Bitcoin and Ethereum more or less flat during the previous day of trading and the broader cryptocurrency market looking unusually stable, the Dogecoin sell-off likely stems from investors taking profit after recent gains. The token started rising earlier in the week and posted even bigger gains after Tesla CEO Elon Musk announced that his electric vehicle company would accept DOGE as payment for merchandise from him. Now, the popular cryptocurrency of memes seems to be taking a breather.
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For the past year, Elon Musk has been best friends with Dogecoin holders. The famed executive has hinted at, and outright expressed, his support for the token through Twitter messages and other channels, and his comments have often fueled impressive gains for the meme-driven cryptocurrency. Even with the recent pullback, Dogecoin is up roughly 19% in the last seven days.
After Musk posted a tweet on Jan. 14 announcing that Dogecoin could be used to buy Tesla products, the price of the token quickly shot up 25%. Although there does not appear to be any coin-specific news behind the cryptocurrency pullback on Sunday, it is not surprising to see Dogecoin give up some ground following the recent rally.
Dogecoin is trading down about 75% from the all-time high it hit last May. However, even after recent volatility in the broader cryptocurrency space and substantial drops in its price, the cryptocurrency is still up roughly 1.900% in the past year.
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Dogecoin started out as a dog-themed clone of Bitcoin, but the token went on to offer some very impressive returns to investors who got into it before its huge price spike. Currently, the token has a market cap of about $23.600 billion and is the XNUMXth largest cryptocurrency by valuation.
While Ethereum, Solana, and Cardano all have underlying blockchain service networks that help shape the performance of their respective cryptocurrencies, Dogecoin's price drivers are currently limited to coin adoption and speculation. If more businesses start accepting the token as a payment method or more trading platforms introduce the option to buy and sell the cryptocurrency, that could help send Dogecoin higher. However, investors should proceed with the understanding that Dogecoin is a high-risk investment, and its trading will likely remain highly volatile.
Miami Daily
Author: MiamiDiario PD 4:28 pm