A major tumble in dogecoin prices has one of the most popular meme assets in the doghouse with investors on Mother’s Day — at least for the moment.
The parodic coin’s stratospheric run-up was facing its biggest challenge in recent trade Sunday after a much-hyped appearance of Tesla CEO Elon Musk on sketch-comedy show “Saturday Night Live” led to a drop in the popular digital asset’s value rather than adding more fuel to its impressive year-to-date surge.
At last check Sunday midday, dogecoin
was down about 33%, changing hands at 48.29 cents, according to CoinDesk. The virtual coin had been down by as much as 36% overnight, hitting a low of around 47 cents in New York.
Its drop has driven the crypto below its 200-day moving average, which stands at 51.99 cents, according to Investing.com. A move above or below a 200-day moving average — a proxy for changes in an asset’s long-term trend — is always closely watched by traders for bullish and bearish trends.
Sunday’s slump was seen by some as bearish for doge after anticipation around Musk’s “SNL” appearance, as a patron of crypto broadly and dogecoin specifically, failed to deliver a jolt to doge.
One Reddit user appeared to blame doge’s fall on a lack of conviction by investors in doge, which was created in 2013 as a lighthearted riff on the emergence of a wave of alternatives to the world’s most prominent crypto, bitcoin
Paper hands refers to investors that tend to sell easily rather than adhering to popular a strategy in the crypto world known as holding indefinitely or “hodling.”
Bullish talk about dogecoin by the chief executive of Tesla Inc.
and Space Exploration Technologies Corp., had been a rallying point for the doge community, which had been eagerly anticipating his appearance, but dogecoin owners who had hoped his mention of the digital currency on TV would boost its price toward $1 were left disappointed.
Doge devotees have very publicly set a target of $1 for the coin in 2021, a number that might seem extremely modest at first glance but not when viewed through the lens that Doge traded at $0.005 on the final day of 2020.
So far in 2021, doge is up over 10,000%, even factoring in its recent pullback. Gains in traditional assets have been pedestrian set against dogecoin. Gold futures
are down 3% so far this year, the Dow Jones Industrial Average
and the S&P 500 index
are up by nearly 13% in 2021, while the Nasdaq Composite Index
has gained about over 6% so far this year.
NBC said that for the first time it livestreamed “SNL” internationally via YouTube in more than 100 countries, including Australia, Brazil and South Africa.
During “SNL’s” “Weekend Update,” co-anchors Michael Che and Colin Jost pressed a fictional financial expert named Lloyd Ostertag, who was played by Musk, to explain dogecoin. His efforts weren’t successful: “OK, but what is Dogecoin?” was the constant refrain of the anchors. Eventually, they reach the conclusion, prompted by Che, that dogecoin is just “a hustle.”
Staunch supporters of dogecoin are advocating for investors to remain committed despite the major setback, which is likely caused by investors opportunistically deciding that it was a good time to take some profits on the speculative surge in doge.
Other purported investors in dogecoin on social media sites like Reddit implied that expectations for Musk’s SNL appearance to be a major catalyst for doge were likely overdone.
Some speculated that the decline in dogecoin was tied to large investor unwinding a big position:
Whale rumors come as Barry Silbert, a power player in the digital-asset sector, said he’s betting against dogecoin and urged investors in one of the hottest trades in 2021 to convert their doge holdings into bitcoin via a Saturday tweet.
Silbert also said that he would donate $1 million to charity if dogecoin hit $1 by May 31.
The doge army, so far, has taken Silbert’s comments as an affront.
Still, others pointed to technical glitches on popular trading platform Robinhood Markets as contributing to some of the downturn in doge early Sunday.
Popular financial blogger and CEO of Ritholtz Wealth Management in Midtown Manhattan, Josh Brown in a Saturday blog wrote that “SNL’s” record spoofing on financial markets has tended to mark the top of most assets, including the speculative fervor around GameStop Corp.
and nonfungible tokens, or NFTs.
“I think it’s worth pointing out that ‘Saturday Night Live’ has done lots of stuff about financial markets and the economy recently and the sketches have actually been pretty funny. Unfortunately, they’ve also marked the top in price or enthusiasm for the underlying subject matter,” he wrote.
In the end, the dogecoin army is trying to look on the rosier side of things. Early investors are still enjoying major gains.
It’s the newbie investors who are facing the most pain.