Retail investors were trading apes for Shiba Inu puppies on Friday, as Dogecoin (CCC:DOGE-USD) rocketed to a new all-time high above 43 cents. With many expert Dogecoin price predictions in the rear-view mirror, it is not clear what the future holds. More importantly, many are just not so sure what to do with the meme coin. So, the question is, when to sell Dogecoin?
Importantly, as InvestorPlace Assistant News Writer Brenden Rearick highlighted today, Dogecoin has achieved quite the impressive feat. Earlier this week, one token was trading hands for just about 7 cents. Then, it took out new all-time highs above 10 cents, 20 cents, 30 cents and then ultimately, 40 cents. Along the way, it climbed as high as the No. 6 crypto in terms of market capitalization. That put it just below altcoin favorite XRP (CCC:XRP-USD).
Plus, as InvestorPlace contributor William White highlighted, many retail investors have already made a pretty penny thanks to climbing Dogecoin prices. If you had invested $1,000 in DOGE this time last year, your stake would be worth more than $230,000 right now. If you had even invested your first $1,200 stimulus check, that stake would be worth more than $150,000.
So when to sell Dogecoin? InvestorPlace has three tips below, but treat these as strategic guidelines and not an instruction. With the power of the DOGE community, there is certainly value in holding your Dogecoin and learning a valuable lesson from Reddit.
When to Sell Dogecoin? When DOGE Blows Past Your Target
One tip to determining when to sell Dogecoin requires you to evaluate your ideal price target on DOGE. Writing for Investopedia, Ryan Fuhrmann highlights that this is a staple practice of astute investors. When you first bought Dogecoin, what price did you hope it would hit? And what experts have you been following?
For some investors, the recent rally may have exceeded their expectations, and now may feel like the time to sell and take some profits. Plus, as InvestorPlace Assistant News Writer Brenden Rearick highlighted, many expert price predictions now appear irrelevant. Going into this week, many experts were simply hoping for Dogecoin prices to hit 14 cents by the end of 2021. That goal is now in the rear-view mirror, even as DOGE cools down today.
For others, expectations are still high, and that is totally OK. Some investors firmly believe in price targets of $1 or higher for Dogecoin, meaning that the rally this week is just one step along the way. Consider this advice from InvestorPlace Markets Analyst Thomas Yeung:
“Selling Dogecoin depends on your personal situation. 80% of Dogecoin wallets still hold less than $400, so most small investors can comfortably hold on without a risk of major personal loss. Selling is a deeply personal choice tied to how much $400 means to you.
The math quickly changes for the lucky 1.0% of Dogecoin wallets with more than $40,000 of DOGE, or the 0.14% that hold more than $400,000 of DOGE. For these people, even a 20% drop in Dogecoin can mean serious losses. They should consider taking some profits to lock in their gains, even if they want to speculate on further gains.”
This means as you are considering when to sell Dogecoin, you need to evaluate your risk tolerance and your upside targets.
When You Find a Better Altcoin
One reasons investors may choose to sell Dogecoin comes back to the factor there are several other altcoins gaining steam in recent days. This is thanks to the growing popularity of Bitcoin (CCC:BTC-USD), and the Coinbase (NASDAQ:COIN) direct listing. Both are thrusting cryptocurrencies into the mainstream, and helping earn cryptos support from key institutional players.
Now, many investors are looking for the next cryptocurrency to explode in 2021. These high-potential names can include those with ties to Coinbase, like new listings on its trading platform. Other cryptos in the spotlight include exchange tokens like BinanceCoin (CCC:BNB-USD) and Uniswap (CCC:UNI-USD), drawing attention for their status as Coinbase alternatives.
Lastly, now is a good opportunity for investors to find thematically relevant cryptocurrencies. Some insiders have identified privacy tokens as a key area for profit, thanks to growing consumer preferences for privacy and security. That could make a token like Zcash (CCC:ZEC-USD) a better investment right now. As with the first tip, consider why you are investing in Dogecoin and what you are hoping to achieve. If you would rather take some profits and put your money to work in one of these red-hot altcoins, that could be a smart choice.
When Something Does (or Doesn’t) Changes
The last tip for deciding when to sell Dogecoin comes down to its fundamentals.
To start, many investors are not exactly investing in Dogecoin for traditional reasons. In fact, Yeung highlighted yesterday that the community support and power behind DOGE actually makes it an appealing educational opportunity. That means if community support fades or shifts, you could find yourself wanting to take some profits.
However, Yeung has another proposal. Dogecoin maintainers could make a few fundamental shifts that improve the bull case — including justifying Dogecoin price predictions above $10. Unlike Bitcoin which benefits from scarcity, new DOGE tokens are created every single day. This means that with a growing supply, there may not be potential for it to rally as exponentially as Bitcoin has. If the developers address its inflationary mechanics, that could change. A failure to see Dogecoin address something like this could be a reason to sell.
Remember, the decision when to sell Dogecoin is highly personal as Yeung says. Just make sure you know what you are hoping to achieve and that you keep a close eye on Dogecoin prices. If you are lucky, DOGE could keep heading to the moon.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.