10/17/2022 | Coin Journal
Should you buy Dogecoin?
Dogecoin price has been in a consolidation phase in the past few days. DOGE was trading at $0.060 where it has been in the past few days. It has fallen by more than 64% this year, making it one of the worst-performing big-cap coins.
Why is DOGE crashing?
Dogecoin has been in a bearish trend as investors worry about multiple things, including high-interest rates and low demand. This decline is in line with that of other cryptocurrencies like Bitcoin and Ethereum.
The Federal Reserve has embraced an extremely hawkish tone this year. It has hiked interest rates by 300 basis points this year. At the same time, the bank has decided to implement quantitative tightening (QT) policies by reducing its balance sheet.
Historically, risky assets like Bitcoin and Dogecoin tend to underperform in periods of high-interest rates. This also explains why American indices like the Dow Jones and the Nasdaq 100 have plunged as well.
Meanwhile, Dogecoin has crashed because of soaring inflation. Data published last Wednesday showed that the headline consumer price index (CPI) remained at an elevated level in September. This increase was bigger than what analysts were expecting.
As a result, analysts believe that the Federal Reserve will continue hiking interest rates in the coming months. Precisely, they expect that the bank will hike rates by 75 basis points in November and by 50 basis points in December.
DOGE price has also declined because of the falling demand. As you recall, Dogecoin had a strong performance in the first part of 2021 after the endorsement by Elon Musk. Recently, however, Elon Musk has remained muted about Dogecoin. And when he talks, the coin has often reacted mildly. On-chain data shows that Dogecoin activity has been relatively muted in the past few months.
Dogecoin price prediction
Should you buy Dogecoin? The daily chart shows that DOGE price has been in a tight range in the past few weeks. In this period, the coin has moved below the 25-day and 50-day moving averages. A closer look shows that it has formed a head and shoulders pattern. In price action analysis, a H&S pattern is usually a bearish sign.
The Relative Strength Index (RSI) has moved slightly below the neutral point. Therefore, Dogecoin will likely have a bearish breakout as sellers target the next key support level at $0.050. A move above the resistance at $0.065 will invalidate the bearish view.
How to buy DOGE
As DOGE is such a new asset, it's yet to be listed on major exchanges. You can still purchase DOGE using a DEX (decentralised exchange) though, which just means there are a few extra steps. To buy DOGE right now, follow these steps:
1. Buy BNB on a regulated exchange or broker, like Binance ›
We suggest Binance because it's one of the world's leading multi-asset trading platforms, an exchange and wallet all-in-one with some of the lowest fees in the industry. It's also beginner-friendly, and has more payment methods available to users than any other available service.
2. Send your BNB to a compatible wallet like Trust Wallet or MetaMask
You'll need to create your wallet, grab your address, and send your coins there.
3. Connect your wallet to the 1Inch DEX
Head to 1Inch, and 'connect' your wallet to it.
4. You can now swap your BNB for DOGE
Now that you're connected, you'll be able to swap for 100s of coins including DOGE.