Traders Should Beware a Rabid Dogecoin

What’s a couple pennies among traders? It could be slippage. And most often it is. But when it involves well-traded meme crypto play Dogecoin (CCC:DOGE-USD), it’s so much more on the DOGE price chart. And as we’ll explain below, that continues to be bad news for DOGE apes and bulls.

A close-up shot of a Shiba Inu with a grinning face.
Source: Wollertz / Shutterstock

In some ways 18 or 19 cents isn’t a lot. It’s what one might expect when exiting or opening a trade in a name like Tesla (NASDAQ:TSLA) or another higher-priced, volatile stock.

But for notorious crypto play DOGE, whose utility was birthed as a joke several years back and today, whose value is most prized among meme-trading apes, that’s the whole kit and caboodle.

Yup. For about 18 or 19 cents these days a person, I’ll refrain from saying an investor can own DOGE. And that price is hiding a problem. OK, hiding might be the wrong word. Swept under the carpet? Yup.

Real Price Tag for Dogecoin

Unlike penny stocks on listed companies whose valuations rarely exceed the extremely well-paid brass at top tier Fortune 500 companies, DOGE’s real price tag is more than $24 billion. And all too often that steep price DOGE bulls are paying gets lost in the conversation.

Of course, it’s fair to say worrying about Dogecoin’s market cap isn’t aligned with the joke DOGE was intended to be. But neither is the 18 to 19 cent price tag associated with that valuation.

I get it though, well kinda. The thing is there’s way too many cute images and gifs of Shiba Inu dogs to pass around on social media that demand investors, or umm DOGE owners, attention. As well, there’s Tesla’s fantastically rich Elon Musk too pay attention too. Selectively at least.

Elon’s almost daily tweets have been instrumental in fanning the flames of Dogecoin’s rabid base. Appreciatively though, the world’s second richest individual net worth is estimated at $150 billion.

Importantly, that kind of wealth towers above DOGE. The thing is, if Elon wanted, he could afford to lose it all and multiple times over on Dogecoin.

Realize this too. When Elon’s not using hashtags to promote the coin, an SNL skit which marked the top in DOGE suggests he’s in on the joke that is Dogecoin. The truth is out there if you know where to look. Maybe?

Dogecoin Weekly Price Chart

Dogecoin (DOGE) failure to hold deep corrective hammer appears imminent

Source: Charts by TradingView

To kinda sorta walk the aisle on behalf of DOGE, the meme crypto hasn’t been alone in its misery the past couple months.

From Bitcoin (CCC:BTC-USD) and the digital asset market’s largest coin by valuation,  blockchain favorite Ethereum (CCC:ETH-USD) or up-and-comer Polygon (CCC:MATIC-USD), cryptocurrency bulls have their tails pulled in like a scared dog. So, there’s that I suppose.

Also and if you weren’t aware, you can buy Dallas Mavericks swag with DOGE. Value? Maybe?

More probable, owner, billionaire businessman and Shark Tank host Mark Cuban also has enough cash to not even blink if the high-risk bet doesn’t work out. Likely.

Of course, most of us aren’t Mav’s fans. More importantly, the reality is most of DOGE’s meme-driven base’s only purpose is to make a trade for more Benjamins than where they began a transaction in Doge – and no matter it’s real or imagined worth.

Bottom line, remember the signage “Beware of Dog(e)” when considering ownership of a $24 billion purchase that looks risky off and on the DOGE price chart.

On the date of publication, Chris Tyler holds (either directly or indirectly) positions Grayscale Bitcoin and Ethereum Trusts (GBTC, ETCG and ETHE). The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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