Dogecoin rose to an all-time high close to $0.42 Tuesday before paring its gains slightly. Supporters of the coin were celebrating April 20 as ‘Doge Day’ online after a 600% monthly rally. Yet many analysts have predicting that buyers will get burned by a sharp drop in the cryptocurrency.
Dogecoin rose to an all-time high close to $0.42 on Tuesday before paring its gains slightly, as supporters of the meme cryptocurrency celebrated April 20 as ‘Doge Day’ after an astounding rally.
The digital coin, started in 2013 as a joke, was down 3.4% in the 24 hours to 9.35 a.m. ET to $0.41317, according to CoinGecko. That was just off the all-time high of $0.41888 touched earlier on Tuesday.
Dogecoin has rallied remarkably in April, rising roughly 610% after starting the month at around $0.054. Its 1-year return stood at more than to 19,000% on Tuesday.
The cryptocurrency’s rise seems even more outstanding when compared to bitcoin and ether, both of which have tumbled in recent days, as a bout of buying in the wake of the Coinbase IPO has died down.
Bitcoin was roughly flat at $56,100 on Tuesday, off recent highs of close to $65,000. Ether was trading at around $2,210, down from highs of above $2,500.
Online fans of Dogecoin, which is based on the meme of a Shibu-Ina dog, were celebrating April 20 as ‘Doge Day’.
Many hoped the cryptocurrency could break $1 and enthusiastically voiced their support online. Many tweeted weed-based Doge memes, in a reference to the date’s significance in weed culture.
Even major companies such as Snickers were getting involved. Its account tweeted: “Guess what day it is? #DogeDay. Tomorrow? #DogeDay420.”
The Dogecoin rally has bemused market analysts, with many saying the cryptocurrency is a purely speculative asset with next to no use value.
“Dogecoin has bounced higher, fueled yet again by chatter across internet forums, with influencers pushing the crypto currency higher,” said Susannah Streeter, senior markets analyst at Hargreaves Lansdown.
“As we saw with the GameStop frenzy earlier in the year, traders have once again adopted a game mentality, trying to propel the price higher using hashtags and rallying cries on internet forums.”
Yet Streeter said: “Investors should be extremely cautious about getting caught up in this herd mentality because Dogecoin is very much a speculative bet whose valuation has no reliable basis.”