Dogecoin price is under pressure after it rose by more than 800% in less than three days. The DOGE price is trading at $0.0388, which is 47% below last week’s high of $0.0736. Its market cap has dropped to $4.85 billion, making it the 14th-biggest digital currency in the world.
What happened: Dogecoin has been one of the most hyped digital currencies in recent weeks. It started when Elon Musk, the richest man in the world, posted about it in Twitter. His post caught the attention of Reddit and Discord day traders who started to hype about it, pushing its price to a record high.
The same traders were responsible for hyping stocks like GameStop and AMC. During the weekend, the Dogecoin price dropped, in a classic case of a pump and dump scheme as the hype died-off. Instead, the same traders started to hype Ripple, the embattled currency that has been targeted by the SEC. So, what next for DOGE?
In my report on Friday, I wrote that the DOGE price would rise but warned that there are substantial risks. I cautioned traders to be careful about the amount of money they allocate to the coin.
Today, the Dogecoin price is at $0.0388, which is about 47% below its highest point last week. Still, I believe that Dogecoin is still not out. On the daily chart, we see that it is forming what seems like a bullish pennant pattern. This is happening as some previous buyers exit to take profit.
Therefore, while there are substantial risks of investing in Dogecoin, I recommend against going short at this time. In my view, bulls will attempt to retest last week’s high of $0.0736.
