About hype, the risk of a crash and short opportunities

Dogecoin pumps and pumps like there’s no tomorrow. The meteoric rise is the result of a swarm of investors who – as in the Gamestop affair – are organized via Reddit. The rally falls on fertile ground especially in the USA, where the “dog coin” has already shaken off Bitcoin.

Power failure at Chinese miners, mass liquidations – crazy scenes took place on the crypto market again at the weekend. Probably the biggest curiosity is the never-ending Dogecoin soaring. Not many would not have given the DOGE rally a long half-life a few months ago, but the DOGE performance teaches them better. Since the cryptocurrency passed the 10 cent mark, the rally has never stopped. 470 percent in one week, only the annual balance is even more impressive. Those who recognized the signs a year ago can look forward to five-digit returns today. But it is precisely this calculation that (still) takes the rally ad absurdum.

Dogecoin hype on social media

Because greater profit-taking has not yet occurred. Dogecoin is inflated as long as it can – or in the dream of Doge investors to the moon. It is written in the stars at which price level this “moon” is reached and whether it is then collectively cashed out. At least at the moment, the end of the story doesn’t seem to have been reached. The foray through the orbit may still be a long time coming, but Dogecoin has catapulted itself impressively forward in the ranking of the largest crypto assets. With a market capitalization of almost $ 50 billion, Dogecoin overtook Tether in fifth place at the time of going to press.

The unprecedented rise is ensured by investors who, like in the Gamestop affair, organize in thousands via Reddit forums. How big this hype is can be seen in the Dogecoin subreddit read, which is currently growing the fastest of all subreddits with over 150,000 new users in just one week. As far as daily posts are concerned, the channel is currently ahead of all the other sub-forums, although the channel with 1.4 million participants is only 328th in terms of size.

Even Bitcoin has already ousted Dogecoin – at least in terms of search queries, and only in the USA. But at least: In the land of unlimited possibilities, the coin hits a nerve.

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Elon Musk is someone who keeps teasing this nerve and constantly supplies the rally with memes. Although the Tesla boss has come into conflict with the regulatory authorities several times because of his tweets, his Twitter profile is still arguably the largest Dogecoin advertising space. No matter how far the self-proclaimed “Imperator of Mars” goes, the DOGE community still eats every tweet treat out of his hand.

Safety nets for the collapse

Like no other coin, there is a high correlation between Dogecoin and the meme culture – not exactly the most stable foundation for long-term growth. Fundamental analyzes are nowhere near Dogecoin. The fact that DOGE has an unlimited amount in circulation or is largely centered on a few wallets is only acknowledged with a shrug. The DOGE rally defies the laws of the market. However, the fact that every all-in strategy is necessarily heading towards an exit, Dogecoin is not a perpetual motion machine that yields eternal profits for everyone, will also be felt by this rally. The more DOGE inflates, the higher the risk of a crash.

In this case, however, investors can prepare, keyword: shorting. Be it futures, perpetual swaps or leveraged tokens: There are numerous ways to make a profit from a price crash. We have put together an overview of the various methods and what you need to consider here.