• Dogecoin (DOGE-USD) recently dropped below the psychologically important 10-cent level.
• Hold tight as Elon Musk will catalyze prices upward.
• DOGE is also addressing age-old problems, remain steadfast.

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The news for Dogecoin (DOGE-USD) and the broader cryptocurrency market has not been good of late. Market bellwethers Bitcoin (BTC-USD) and Ethereum (ETH-USD) have gotten trounced. Dogecoin has fallen in lockstep. But investors should hold on for dear life because things aren’t as bad as they may appear. 

Bitcoin has shed more than 36% of its value year-to-date, undergoing a spectacular drop over the past 2 weeks that saw it dip below $27,000. Ethereum has fared even worse, down 47% this year. 

And as those leaders go, so too does the broader cryptocurrency market. That has caused Dogecoin to sink below the 10-cent level, a price it hasn’t traded at since it burst onto the scene more than a year ago. 

Serious Lows

Dogecoin isn’t dead. That’s good news. The bad news is that it has dipped below $0.10, a level that it hasn’t traded at in over a year.

Although Dogecoin has been having trouble of late, acute problems sent it sharply downward on May 11th and May 12th. The problem was that Terra (LUNA-USD) has collapsed, becoming almost worthless. It is linked to the stablecoin TerraUSD (UST-USD), which is supposed to be pegged to the dollar. However, it has traded well below $1 catalyzing a massive selloff that has made Terra nearly worthless. 

The news is causing serious speculation and even extreme fear that a house of cards scenario is present. That has DOGE trading below $0.10. 

But here’s the positive news: Dogecoin isn’t a stablecoin. It isn’t supposed to behave similarly to the dollar. The fact that LUNA and UST faltered is proof that designing a digital product to mimic the USD isn’t easy, or perhaps possible. But it in no way means that DOGE is at risk of death. 

It is certainly a strike against cryptocurrency at large, but Dogecoin will survive. 

Powerful Catalyst for Dogecoin

And Dogecoin has a powerful backer in Elon Musk. The idea that musk’s impending purchase of Twitter (NYSE:TWTR) will benefit Dogecoin is well-established.

That means that HODLers should simply sit tight as this saga unfolds. Is it good for cryptocurrency? No, probably not. But it’s going to serve as some sort of test for cryptocurrency. So those coin holders are going to have to hang on undoubtedly. But all DOGE investors are also well aware that Elon Musk is going to do a lot to champion Dogecoin.

Tesla (NASDAQ:TSLA) accepts Dogecoin and no other cryptocurrencies. My colleague Mark Hake pointed this out in a recent article. He also pointed out that Twitter will accept Dogecoin as a form of payment or its anticipated subscription services under his leadership, referred to as Twitter Blue. 

So while the current news is undoubtedly negative, Dogecoin has a powerful positive catalyst waiting in the wings. Elon Musk Will continue to champion Dogecoin. 

Utility Rising

DOGE is also increasing its utility. Investors have long criticized it for its narrow use cases and lack of utility. However, I recently wrote about the news that Gucci (OTCMKTS:PPRUY) will accept Dogecoin as payment moving forward.

That opens new utility and use cases for DOGE. So, despite the negative headlines affecting the cryptocurrency market and pulling DOGE to very low lows, holders shouldn’t sell. 

What to Do

Dogecoin is clearly facing a significant test currently. Despite those issues, there’s plenty to be positive about. further, those investors who have been caught out by this dip don’t have much choice right now. the best course of action is to hold on and remain positive about the meme coin’s future.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.