- Dogecoin (DOGE-USD) is a legitimate asset generating serious profits
- Trade brings short-term opportunities
- Investing in it brings long-term success
Although the cryptocurrency is a new asset on Wall Street, its component charts still work the same way as common stocks. This is fortunate for us who use technical charts to gain an edge while investing in them. In the longer term, the fact is that Dogecoin (DOGE-USD) brought huge profits to its investors. This is likely to continue for a long time. Meanwhile, there will also be plenty of short-term fortunes for more active traders.
But before discussing the upside profit potential, we must first discuss the concept of crypto in general. It is difficult for retail investors to get clear advice from the outside. The crypto rhetoric from experts is overly optimistic. Conversely, the criticism is far too broad and binary. Celebrity haters carry weight, and their influence hurts those who listen to them in the long run.
Ultimately, Dogecoin brought big profits to its investors. In other words, this is no joke, people and those who ignore it are missing out on serious profits. The concept of crypto is here to stay, so people should overcome their skepticism. I remember staunch supporters of the “super information highway” in its early days. Now everyone is on it and we don’t even hesitate to use all of its facets.
Dogecoin serves a bigger purpose
Asset opportunities like the DOGE-USD are setting the stage for the global financial future. Every aspect of our lives is going digital, so money will be no exception. Whatever currencies we settle on, Doge helps lay the groundwork for them. The technologies that present themselves to them now form fintech. This is an extremely popular investment trend and for good reason.
The concept has evolved enormously since intrepid companies like Visa (NYSE:V) and MasterCard (NYSE:MY) established it. Now younger teams, like Block (NYSE:SQ) and To affirm (NASDAQ:AFRM), took up the torch for the next leg of the race. There should be no doubt about the viability of Dogecoin as an investment asset.
Like every other meme topic, DOGE-USD rallied too far too fast last year. It exploded over 9000%, but by May the crash had already begun. At its lowest this year, Dogecoin had lost 35% of its value. The important thing is that it bounced off the pivotal areas of last year’s breakout. There was a big fight between the bulls and bears above the 10 cent mark. Bouncing gives Dogecoin bulls confidence that they have a floor below. From there, they built a 60% rally to challenge the 20 cent level. If they can reach new highs this month, they may even regain November levels.
But the most exciting part about it is longer term. Investors would do well to pile it on the big dips a little at a time. This has been a winning strategy for decades for assets like gold and now cryptocurrency. It’s hard to identify perfect entry points, so we should spread them out to what we think are reasonable levels.
For now, there are buyers as it approaches 10 cents and sellers near 30 cents. Active traders can swing the range for profit. But overall, Bitcoin (BTC-USD) is still the main responsible piece. Therefore, his price action affects everyone else, even Doge. BTC-USD is in its own fight trying to convincingly recover and hold $46,000. For a brief moment last month, he did, but gave up the ghost. The risk is that there could be another big drop in all cryptos if Bitcoin loses the January low.
Therefore, investors would do well not to deploy all funds at once. Leaving some powder dry to buy more dips is a sensible strategy. I’m not concerned about the potential crypto fix as I technically expected it. In fact, I argue that Bitcoin needs to retest its $20,000 cleavage that fueled the mega rally of 2020. Even when that happens, it would be part of normal price action in an abnormal spike. Stock prices and crypto can’t break the laws of physics for too long. Occasionally they have to come back and get rid of the scum that seeps into them. This is the only way to build a better foundation for future profits from Dogecoin and others like it.
At the date of publication, Nicolas Chahine did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.