After a series of false starts, it finally looks like Dogecoin could be about to stage a comeback.
The altcoin, launched as a fun digital currency in December 2013, has seen its price pick up again – leading one analyst to suggest it could trigger an upward trend not just for Dogecoin itself, but for all other altcoins in the market.
But is this really the start of an upwards trend or just another short-term increase? Read on to find out.
What is Dogecoin?
First off, it’s worth reminding ourselves what Dogecoin actually is. The coin originally started out as a bit of a joke – it was inspired by the Shiba Inu meme and created following a flippant tweet by Jackson Palmer: “Investing in Dogecoin, pretty sure it’s the next big thing.”
Dogecoin was based on an existing cryptocurrency, Luckycoin, which was is itself based on Litecoin – a “lighter” version of Bitcoin which uses scrypt technology in its proof-of-work algorithm.
Despite its not-so-serious beginnings, Dogecoin has proved to be a huge success. The coin has a vast fan base, which has helped to turn it into a major cryptocurrency with a current market cap of more than $300 million. Dogecoin is often used to tip people over the internet and to raise funds for charitable causes.
Dogecoin’s price history
Dogecoin has seen several rapid price increases throughout its history, and it has long been recognised as an early indicator of an alt season – when investors develop a very positive sentiment towards altcoins. Traders watch the Dogecoin price closely because an alt season can lead to huge gains across all alternative coins. In December 2017, for instance, the vast majority of altcoins gained their initial market valuations many times over in just a few weeks.
Alt seasons were pretty much non-existent in 2018, leading many crypto enthusiasts to prophesise about when the next alt season could arrive. Dogecoin has had a lacklustre 2019 so far, but it is finally showing signs of a breakout, which some analysts believe could signal the start of a new alt season.
The start of a comeback?
Dogecoin looks as if it might have begun a long-term upward move. After a downward spiral since the summer, the price has been steadily rising this month and jumped by 7% in just one day a fortnight ago.
Crypto analyst @TraderLenny alerted investors to the possibility of an alt season in a tweet last week: “Remember that one altcoin that was supposed to be the leading alt season indicator? It just started moving.”
Dogecoin is currently priced at $0.0026, but some analysts reckon it could rise to around $0.007 before the end of 2019. In June, Coin Hash Reports stated that Dogecoin “is bending again to the bullish nature, acquiring attention, and better investment portfolios from different investors”.
“It is the right time to initiate fresh investments in Dogecoin as the trend is expected to be bullish and fetch great results later,” it said. “DOGE has improved in terms of credibility and valuation of the coin in the market. However, it is expected that Dogecoin may trade around $0.007 by the end of the year.”
Other crypto analysts suggest Dogecoin could reach more than $1 in the coming years, with the market recognising the coin as a superior form of payment to fiat currency.
Proceed with caution
No one really knows what will happen to the price of Dogecoin, so investors should proceed with caution. Like all cryptocurrencies, it’s impossible to really predict the future because the market depends on so many different variables – and it is inherently risky.
Dogecoin doesn’t have a stable development team and hasn’t had any technical updates in nearly five years which, many would say, should set alarm bells ringing. Moreover, it’s worth pointing out that DOGE is an inflationary currency with a huge circulating supply of more than 100 billion coins. Some experts reckon this could lead to stagnation or even price depression.
Even if Dogecoin doesn’t stage a huge comeback, however, it’s likely it will continue to be an appealing option for those seeking a coin with fast transaction times and negligible transaction fees, backed up a vast and passionate user base.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.