Elon Musk’s ‘hustle’ Remark And Other Possible Reasons Why Dogecoin Price Crashed
Elon Musk’s ‘hustle’ remark and other possible reasons why Dogecoin price crashed
Dogecoin had a banner week last week, soaring to $0.70 on Wednesday morning after hitting all-time high after all-time high.
However, the price plummeted during the early hours of Sunday after Tesla CEO Elon Musk, a longtime supporter and self-proclaimed 'Dogefather,' stated on Saturday Night Live (SNL) that it is all a 'hustle.'
Mr Musk responded to Michael Che's request for a definition of dogecoin by stating that "it is the future of currency." It's an unstoppable financial vehicle that's about to take over the world... As I've previously stated, it's the cryptocurrency that can be exchanged for conventional currency.”
When Che inquires whether this means the cryptocurrency is nothing more than a 'hustle,' Musk agrees, saying "Yeah, it's a hustle."
Following Musk's comment, Dogecoin's price fell nearly 22%, from 64 cents to 50 cents, according to Coindesk data.
However, some experts believe that the reason for the decline extends beyond Elon Musk's comments. According to an investor, the Dogefather's joking remark merely sparked the crash that had been brewing since the coin reached an all-time high.
Market Trend – A new price peak is followed by a price decline
His explanation is not so strange, given Dogecoin's history of extreme volatility. And this could be because the cryptocurrency was created as a joke in 2013.
Although celebrity endorsers such as Jordan Belford and Elon Musk have boosted doge's popularity, the coin has a massive supply, with approximately 10 million Dogecoin added to the supply each day.
This means that in order for prices to continue to rise, people would have to continue pumping money into it. This is unsustainable on a long-term basis.
Experts believe that after the coin reaches an all-time high, it is natural for people to sell it for enormous profits. However, it lowers the price, and as the price falls, people begin to sell out of fear of losing money on their investments.
He added that this results in a chain reaction of sellers, driving the Doge's price significantly lower in a short period of time.
Large amounts of Dogecoin being sold off by institutional investors and whales
Prior to the crash, Doge reached $0.70 but fell short of the $1 mark desired by many Dogecoin enthusiasts. Numerous Reddit users believe that the rally fell short of the milestone because major investors were limiting the coin's rise.
According to InvestorPlace, users believe that a single whale is attempting to keep the price of DOGE low by selling millions of tokens each hour.
Others speculate that it could be a case of large investors liquidating their Dogecoin holdings as a result of the recent price spikes.
Whichever is correct, the speculations point to Whales as the possible cause of the crash.
In summary, Dogecoin's price has increased by approximately 1400 percent in the last month, from $0.5 at the beginning of April to around $0.72 today.
Despite the crash, the currency has gradually recovered, trading at 55 cents with a market capitalization of $70.87 billion at the time of filing this report.
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