Dogecoin market analysis: Black Thursday for Dogecoin

DOGE/BTC

The price of Dogecoin has been falling during the last 72 hours, and today the decrease in rate has become increasingly rapid. Dogecoin had been trading near 100 satoshis (1 satoshi = 0.00000001 Bitcoin) for about a week, and 100 satoshis was considered a healthy support level. On May 20, the price of Dogecoin began to decline, right as the Bitcoin market had its first rally in over a month. The decline was steady at first, and at the start of today, Dogecoin was trading near 93 satoshis.

Today the decline in Dogecoin’s price has rapidly accelerated, and it has traded as low as 71 satoshis this evening. This represents a 30% drop in the value of Dogecoin relative to Bitcoin in 72 hours. There is a lot of market volatility right now, and Dogecoin has been trading as high as 76 satoshis before another wave of selling pushes it back to the lower 70s. Over 10 million Dogecoin is being sold per minute on Cryptsy at times.

It is hard to tell what is causing this Dogecoin sell-off. The price of Bitcoin has risen from $445 to $540 during the same 72 hours Dogecoin has fallen, and it’s possible that some of the selling we’re seeing is from people moving their money from Dogecoin to Bitcoin. The rise in the price of Bitcoin has softened the decrease in Dogecoin’s rate relative to the USD. The price per Dogecoin has gone from $0.000445 to $0.000391 over the last 72 hours, which is ‘only’ a 12% decline in value relative to the USD, versus a 30% decline in value relative to Bitcoin. Most of this decline relative to the USD has happened today, though, and 12% in 1 day is steep.

Regardless of the cause, it appears we’ve reached panic selling mode this evening on the Dogecoin market. This is reminiscent of a stock market crash, and today could be considered Black Thursday for Dogecoin. We are seeing the lowest prices of Dogecoin relative to Bitcoin this year, and Dogecoin has now fallen 68% from its peak price of 296 satoshis in February. The only Dogecoin crash remotely close to this one was when the price hit 86 satoshis around April 10, 2014.

In all likelihood, this is not the end of Dogecoin, and the price will rebound. This is an excellent time to buy if you time the market right. I will be buying at some point tonight or tomorrow but will wait for an indication that we’ve hit bottom since panic selling could cause the price to drop even more. I believe Dogecoin will quickly rebound over 100 satoshis shortly. Frequently dips in Dogecoin’s price have been the impetus for significant rallies.