What happened
It’s Good Friday, but it’s not so good of a Friday for investors in meme token Dogecoin (CRYPTO: DOGE). As of 12:15 p.m. ET, this Shiba Inu-inspired cryptocurrency has declined 8.6% over the past 24 hours. That puts Dogecoin squarely in the doghouse when looking at the crypto leaderboard. Indeed, at the time of writing, this is the worst-performing top-100 token, sorted by market capitalization.
With strong momentum to the upside to start this month, it looks like this is a case of what goes up must (or at least often) come down or at least consolidate lower for a short period of time. This week has seen some bumpy price action for Dogecoin, and it appears this will likely continue for the foreseeable future.
So what
Dogecoin’s initial parabolic surge came on April 3 following a much-discussed and controversial move from Twitter CEO Elon Musk to replace the Twitter blue bird logo with a Shiba Inu sprite (commonly associated with Dogecoin). Musk followed up this move by commenting on previous Twitter threads about how it might be “sickkk” to buy Twitter and replace its logo. This man is willing and able to do almost anything he puts his mind to, something that’s truly incredible.
The Dogecoin community immediately jumped on this latest vote of confidence, bidding up Dogecoin from around $0.076 prior to the announcement to as high as $0.102 this week. Most impressively, this near-35% move took place in the span of roughly an hour and a half. Thus, speculators and traders clearly had a field day trading this token on Monday.
Dogecoin has trended lower over the week, though the decline hasn’t been as abrupt as its rise. In the stock market, there’s a saying that stocks usually take the escalator up and the elevator down. This case is quite the opposite for Dogecoin, with the bulk of its downside move actually being seen today.
Now what
Investors have every right to take profits after a 30% rally in very short order. And while Dogecoin has impressively held most of its gains for longer than I expected, this token is now hovering around $0.08 (broke through the $0.10 threshold at this week’s high), something that intrinsically makes sense to me.
Dogecoin is a fun cryptocurrency with an engaged community, and it touts the world’s richest man (depending on what day of the week it is) as its benefactor. For speculators and traders, this token surely provides the desired volatility.
For most other, more conservative long-term investors, this volatility ought to be shunned. This is a token I’ll never personally invest in for this reason, but it’s also one I’ll always keep an eye on. Dogecoin is just too much fun to ignore.
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Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
