The rave about Dogecoin– an altcoin publicly supported by the world’s richest man, Elon Musk– has been cut short following a disappointing 40% drop in its price as many traders now lose heavily after joining other investors to buy the digital asset.
Following the pump that amplified the crowd’s strength backing the meme-induced Dogecoin, the asset has crashed by 40% after a correction from its high of $0.60 to a disappointing $0.0330 on January 30. Many of the altcoin promoters and backers who were making their first attempt to trade the asset despite its high volatility have been counting their losses.
How the Sanctions by Robinhood Prompted Protest Against Decentralized Exchanges
On January 29, Dogecoin caught public attention by joining the rank of the ten largest cryptocurrencies by market capitalization, its first time in six years. The asset, whose name was inspired by a dog meme in a jocular discussion, had been pushed to an enviable height after being vigorously promoted through social media, as reported by The Tie.
Many pundits have linked the recent surge in Dogecoin to Elon Musk’s Tweets and memes and the natural volatility of the crypto market; others have seen the rise as a sort of revolution started by retail investors against the establishment and financial institutions after Robinhood, the leading trading platform, disabled the buying of some assets.
Those sanctions led by Robinhood and some trading apps incited anger and allegations of injustice against brokers and trading apps. Consequently, the platforms were accused of favoring hedge funds and institutions at the expense of retail investors. This made some retail investors dump some assets in favor of the meme-inspired Dogecoin.
Retail Investors Earlier Wooed by Influencers Lose Heavily
Meanwhile, now that some centralized platforms have settled their cases, Dogecoin made a sharp reversal of fortune in a few hours, causing many retail investors who recently bought the asset to start regretting their actions on Twitter. Mia Khalifa, the celebrity, was one of those who expressed their disappointment in the asset. Apart from him, other influencers and streamers poured their anger on the asset’s drop.
The sharp decline in the process of Dogecoin shedding almost 50% of its value has not in any way attracted its investors to another project with attractive fundamentals. One of the trending Twitter topics is #DogeToADollar. Many investors have pledged to dump the coin.
The rave about Dogecoin began via TikTok, the top video-sharing app, in 2020 when several videos were urging users to invest $25 in the asset to push the price to $1. After that, Dogecoin started trending on TikTok with more than 14 million views, and the coin adding $100 million to its market cap from its previous $288 million.
Expectedly, those who invested early could make some profits from the pump, but late traders got their hands burnt after the sharp drop in the asset’s price. But some researchers and analysts reported that the active addresses of Dogecoin we’re still rising. They added that network usage and valuation decreased, so watchers should expect a rally in the nearest future. The surge in Dogecoin’s price led to several exchanges adding it to their pairs to benefit from recent momentum.