IS DOGECOIN A GOOD INVESTMENT?

The chart above is Dogecoin versus the US Dollar on the daily chart; yesterday, we had a new all-time high for Dogecoin at 73cents. You have to keep in mind that Dogecoin has cycles with massive pumps and massive dumps following it. You can see that when it goes up above the purple box on the chart, it means that it is overbought; people are going crazy in the market. All times this has happened, we have had major retracements of forty to seventy percent retracement. We are entering a similar area with an overbought RSI on Dogecoin. This does not mean that it cannot pump further, but you should expect a major correction to follow suit right after.

Some people said that Dogecoin has been pumping for the past few days because it got an eToro listing. After the listing came in, we saw a big price pump, asides that, Dogecoin is getting listed in several places and getting a lot of liquidity coming into it.

We see the Dogecoin pumps coming in from retail money; we do not see institutional investors like Grayscale or Tesla buying Dogecoin.

Most financial analysts do not believe that Dogecoin is a good long-term investment; we can see the meme hype and the pump coming in from Elon Musk. People are buying in the anticipation that something big will happen for Dogecoin, especially with Elon Musk hosting Saturday Night Live. Still, the thing is that Elon Musk mentioning Dogecoin on Saturday Night Live does not mean that the price of Dogecoin will skyrocket. People might even begin to take their profits, and the price might come down.

The Elon Effect has been very good on Dogecoin because Dogecoin runs on hype; we can see a strong correlation between Elon Musk's tweets and the price of Dogecoin.

Dogecoin is a hype-driven coin which is great for trading but not good for long term hold, so if you intend to push your entire life savings into Dogecoin because Elon Musk tweeted about it, you have to understand that when he stops paying attention to it, he will still be rich despite retracements because he did not invest in Dogecoin, but you might be broke.

One of the things you have to keep in mind with Dogecoin is it has a complete lack of developer activity. Activity in Dogecoin has been non-existent since 2017; there is almost nothing happening because it is a meme coin. There is no real adoption of it, and the developers mostly working on it are the ones who maintain the code.

Dogecoin lacks infrastructure in the sense that there is no institutional custodian, no institutional growth, and no hardware wallet support for Dogecoin. We will not see a Dogecoin ETF or a Dogecoin Grayscale trust because everyone understands that it is only a meme coin and not a long-term investment.