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Can Dogecoin Drop Lower? • Benzinga Crypto


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One of the most popular memecoins, Dogecoin (DOGE) has slumped along with the rest of crypto since the beginning of 2022. Because of regulatory pressures from foreign governments and a collective sense of foreboding from impending Fed interest rate hikes, many stocks and cryptos have reacted sharply and seen notable slumps, with DOGE being no exception. 

Compared to other memecoins like Shiba Inu (SHIB), which has seen a 20% rise since the January slump, DOGE is only back up 7%, begging the question of the coin’s future in 2022. Will the coin make millionaires like it did in 2021, or is Dogecoin on the way out? 

Can Dogecoin Drop Lower Than $0.05?

Unlike blue-chip cryptocurrencies such as Bitcoin and Ethereum, Dogecoin is a speculative asset whose price action hinges heavily on short-term news rather than established fundamentals. Though it can be affected by macroeconomic factors and broader investor sentiment, all it takes is one tweet from Elon Musk to send the price skyrocketing or to the ground. In fact, a recent tweet from Musk stating that Dogecoin can be used to buy Tesla merchandise sent the coin up 13%.

The price of Dogecoin is also dependent on retained investor interest and the applicability of the coin beyond being just a memecoin. For example, Dogecoin is a way for Reddit and Twitter users to interact with content by tipping in DOGE. Along this same vein, Dogecoin has also been used for various crowdfunding and donation campaigns. One famous example of this was when Internet users pooled $30,000 in DOGE to help send the Jamaican bobsled team to compete in the 2014 Winter Olympics. 

These limited use cases, however, don’t influence Dogecoin’s price as much as larger scale market effects or short term events do. This situation ends up producing an uncertain dynamic for investors looking to get in on Dogecoin: a tweet from Elon that puts DOGE on the move or market trends supporting other crypto that occur. Waiting around for either is not a sustainable strategy. If neither happen, Dogecoin’s price could see a drop.

Why is Dogecoin Going Down?

A large part of why the price of Dogecoin and other memecoins are falling is in reaction to the Fed interest rate hikes taking place later this year. Prices of assets like Dogecoin are negatively reacting with the Fed’s decision to increase interest rates to combat inflation, which could be a contributing factor to the January sell-off. Coins like Dogecoin also parallel movement in larger cryptos like Bitcoin, and the general volatility of Bitcoin in reaction to market events could be an influencing factor of DOGE’s price. 

Another macro-level that could be promoting the downward price movement of Dogecoin is Russia’s central bank taking a stern stance on crypto. Russia’s central bank described crypto as a pyramid scheme that seeks to undermine the sovereignty of monetary policy and proposed a ban on crypto trading and mining.

The importance of this statement lies in Russia’s standing as the third largest country to contribute to Bitcoin mining, behind Kazakhstan and the United States. Though no changes have been set in stone, the views expressed by Russia’s central bank could be a contributing factor to Dogecoin’s downward price. 

Finally, the price of DOGE is also influenced by popularity and events in the short term. A recent lack of general hype surrounding the coin could also be a factor explaining why Dogecoin has been seeing a slump. 

How to Short Dogecoin

Trading derivatives is a risky tactic especially given Dogecoin’s acute volatility. When it comes to shorting Dogecoin, however, the process itself isn’t too difficult. The following steps explain how to start shorting Dogecoin. 

Step 1: Open a Crypto Exchange Account

Open an account with a quality exchange that allows you to access derivatives trading. Bybit and FTX are two great exchanges to begin with as each offers state-of-the-art security features and custom tools for traders looking to short DOGE. Both Bybit and FTX are renowned exchanges; however, neither of these exchanges can be accessed by U.S. citizens.

1 Minute Review

Founded in 2018, Bybit is a Singapore-based cryptocurrency exchange offering derivatives in 17 different trading pairs. Available to clients around the world, Bybit has over 2 million users trading traditional futures contracts and perpetual contracts with no expiration. Spot trading is available on the platform, which features a compatible mobile app for download on both iOS and Android devices. Bybit has reliable customer service, sophisticated trading tools, and a wealth of knowledge in its education libraries. However, US residents are shut out from its services.

Best For

  • Cryptocurrency traders of all levels
  • Affordable trading fees
  • API trading
  • Multiple order types

  • Fast server with no downtime
  • Accessible customer support
  • Can make deposits with more than 50 different currencies
  • Intuitive platform with mobile functionality

  • Not available to residents of the US, Quebec, Singapore, or China
  • Spot trading only available to whitelist clients


get started

securely through FTX’s

Step 2: Fund Your Account

Deposit funds in your account prior to trading. Funding your account is straightforward with common methods including direct bank transfers and transferring tokens from another wallet. Once your account is funded, you are ready for the next step. 

Step 3: Choose Your Leverage

Leverage is the ratio of your collateral to your borrowed funds; basically, it can be thought of as a multiplier on your investment. For example, Bybit offers up to 100x leverage when trading crypto. FTX on the other hand offers up to 20x leverage, and though this seems minimal in comparison, the level of risk you are exposing yourself to at a 20x multiple is much lower than 100x. 

Liquidation helps describe this risk further. When it comes to trading crypto, liquidation refers to when your leveraged position is forcefully closed by your exchange once part or all of your initial margin is lost. This action occurs if you can no longer meet margin requirements to be in a leveraged position, and so understanding this concept reveals how higher leveraged positions are more prone to liquidation risk. Finding a level of risk that you are comfortable with is key, and after doing this you are ready for the final step.  

Step 4: Enter Your Short Position

Since a short position on DOGE bets that the price of the token will go down, you should set up a stop-loss order and target price to reduce exposure to loss and volatility. Choose the amount of collateral that you are willing to put up to maintain the ability to trade on margin. Then, click the sell button.

Can Dogecoin Still Hit $1.00 in 2022?

Since Dogecoin is such a volatile asset, much of its price action is unpredictable. Sure, you can look at overall market trends and make educated guesses about where Dogecoin is headed, butb one tweet or event can send the price of DOGE drastically up or down. 

For investors to see a big price increase in DOGE, factors to consider not only include overall market health but also how much buzz there is around the coin. Are celebrities talking about it? What is the Twitter sentiment like? These factors are important to consider as Dogecoin’s price action is highly susceptible to these events and could change on a moment’s notice.

Where To Buy Dogecoin

It’s important to note that not all exchanges host Dogecoin. Some great options to consider, however, include Gemini, Coinbase Global Inc. (NASDAQ: COIN), and Voyager. Even brokerages like Robinhood Markets Inc. (NASDAQ: HOOD) and Webull allow you to access and trade Dogecoin. 

1 Minute Review

Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs. 

You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.

Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.

Best For

  • New cryptocurrency traders
  • Cryptocurrency traders interested in major pairs
  • Cryptocurrency traders interested in a simple platform

  • Simple platform is easy to operate
  • Comprehensive mobile app mirrors desktop functionality
  • Coinbase Earn feature rewards you with crypto for learning about available coins

  • Higher fees than competitors


get started

securely through Robinhood’s

Best For

Buying & selling Dogecoin

1 Minute Review

Robinhood is the broker for traders who want a simple, easy-to-understand layout without all the bells and whistles other brokers offer. Though its trading options and account types are limited, even an absolute beginner can quickly master Robinhood’s intuitive and streamlined platform. On the other hand, more advanced traders might be frustrated by Robinhood’s lack of technical analysis tools, a feature that’s now nearly universal across other platforms.

Best For

  • Fee-free trading
  • Beginner crypto investors
  • Doge day traders

  • Commision-free trading
  • Access to Dogecoin

  • Limited altcoin selection
  • No wallet capabilities


claim free Bitcoin

securely through Voyager’s

Disclosure: *Other fees may apply.

1 Minute Review

Voyager is a leading name in the sphere of cryptocurrency investing, giving you access to over 50 tokens and coins. Buy, sell and swap assets using Voyager Crypto’s simple mobile platform available as a free download for iOS and Android users. 

When you invest through Voyager, you’ll pay nothing in commissions, which is a major benefit when compared to other cryptocurrency brokers. Voyager is also one of the only brokers we’ve seen that allows users to earn interest on their crypto investments. 

Though the broker could do more to improve its customer service, it’s an excellent option for beginner investors and seasoned professionals alike.

Best For

  • Cryptocurrency investors looking for a wide selection of supported projects.
  • Investors who prefer mobile trading.
  • Anyone interested in earning interest on their crypto investments.

  • Simple, straightforward and intuitive mobile platform
  • Wealth of investment opportunities
  • Allows users to earn interest on select crypto investments

  • Only available for mobile users — no desktop platform
  • Limited routes to contact customer service team

Will Dogecoin Keep Crashing?

Several factors could affect the health of DOGE, starting with how crypto in general is doing. Since the January dip, most cryptocurrencies seem to be rebounding. If the markets take a turn for the worse, especially with the Fed’s interest rate set to come out in March, then Dogecoin could face another slump.

More important to Dogecoin, however, are short-term events that could tank its price. A tweet from someone like Elon Musk that diminishes crypto in general could send Dogecoin into a downward spiral. Being mindful of these events is key in understanding the price movements of Dogecoin. 

Dogecoin is also not the only memecoin on the block anymore. For example, Shiba Inu is another widely popular memecoin that can be seen as having more real-world applicability than Dogecoin. Other coins directly challenge the reign of Dogecoin such as Floki Inu and LEASH. As more such coins enter the landscape, investors should account for how the competition could affect the longevity of Dogecoin. 

Is Now A Good Time To Buy Dogecoin?

If your goal is to generate sustainable long-term wealth, Dogecoin is not the ideal way to do so. Investors should look for assets whose performance is tied to its underlying technology or true valuation as ideal long-term investment vehicles. Dogecoin is the opposite with drastic price movements based around social media hype that makes it difficult to figure out when to exit an investment. 

The flip side of this, however, is that for investors with a high risk tolerance, Dogecoin could be a great opportunity to make profits. If investors are able to time the market and can predict the asset’s price to some degree, then they could reap significant returns. It should be noted that this method of investing is inherently much riskier and could also expose investors to significant losses. 

The decision to invest in Dogecoin is wholly dependent on your investing goals and appetite for risk. Only after careful consideration of your investment goals should you decide to invest in an asset like Dogecoin. 


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