Dogecoin’s 4-Month Consolidation Should Scare Investors Away Unless DOGE Reclaims That Level

  • As of May 2022, short-term traders have been the only cohort profiting from Dogecoin, but they have even been at a loss lately.
  • The lack of volatility could create apprehensions among new investors, as DOGE’s risk-adjusted returns are terrible.
  • Dogecoin’s market value is suffering, and the lack of growth could cause Polkadot to flip DOGE to replace it as the tenth largest cryptocurrency.

Dogecoin surprisingly retains its charm despite not having made any major developments for months. However, the lack of improvement could create a climate of concern among investors who will join the network in the fourth quarter.

Dogecoin investors looking for profits

November 2021 was the last time the crypto market saw a real upside, but in the case of some cryptocurrencies like Dogecoin, even November was not the best time. After hitting its all-time high in May 2021, DOGE has been on a steady downtrend from $0.6903 to $0.0604 currently.

Over the past five months, the situation has worsened as DOGE has completely stopped moving. The sideways momentum left only one group of investors in good stead, short-term traders. Scalping off intra-day fluctuations, these traders are the only ones making profits.

Dogecoin 4 hour chart

Although, over the past couple of weeks, their profits have also been squeezed as DOGE fell flat even on the 4-hour chart. So, in order to turn these investments into profits, DOGE needs to go back up to $0.0677.

This price level also marks the level where the 38.2% Fibonacci retracement of the decline from 0.0869 to 0.0570 is located. Recovering it naturally puts DOGE in an upward momentum.

But if the same does not happen in the next few weeks, it may cause apprehensions in the minds of new investors.

No returns, no value

Lack of volatility becomes the bane of Dogecoin since the meme coin’s risk-adjusted returns are still negative right now. The Sharpe ratio is currently at -0.25%, which is not the most attractive number at the moment.

Dogecoin Sharpe Ratio

And without improving yields, the market value of the asset is also stuck below the neutral line. These factors could prevent potential investors from putting their money in Dogecoin.

Market value of Dogecoins

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