Investors were once again reminded that gravity exists. The Dogecoin price crashes 43% on news that Crypto pioneer Barry Silbert has a short position.
It seemed like only yesterday I warned investors of the perils in chasing DOGE/USD valuations higher.
Money has piled into the Dog-themed crypto coin of late. Investors have rushed to jump on the tail of DOGE’s recent meteoric bull run and pushed the Dogecoin price higher by +18,000% at its 2021 peak.
Much of the gains were added in the last week as Dogecoin fan and Tesla ‘Technoking’, Elon Musk was announced as co-host of tonight’s Saturday Night Live. This caused the price to add 90% over a four-day period, climbing from $0.385 to $0.7400.
Why The Dogecoin Price Crashed
Whist Elon Musk’s Twitter account may have more followers, it was Barry Silbert’s feed that caused the latest price reaction:
An early investor in Coinbase (COIN) and Ripple labs, Silbert is also known as the brain behind the world’s largest crypto fund, Grayscale Bitcoin Trust (GBCT).
And when the legendary investor talks, the market listens. On Thursday, with the Ehereum Classic price trading at $100.00, he disclosed that he has a long position from $0.50.
It has, however, taken him a while to see the 20,0000% return. He has held the position since 2016.
Dogecoin Price Outlook
The Dogecoin price suffered steep losses and was sold hard, down to $0.4200 before bouncing to the current $0.5059 level.
As the market flushed lower, it took out an important trend line at $0.4750, in place from the 23rd of April low. The price has managed to stabilize and is currently sitting above the threshold for the time being.
With the price experiencing wild gyrations, it becomes increasingly difficult to predict the future direction. Instead, traders should remain cautious. Therefore, monitoring the situation closely to see how it develops might be the best course of action.
If the trend fails to hold, the price could extend losses and put the 29th of April low at $02.2951 in play.
Traders may consider the current slide nothing more than a corrective shake-out if the market can consolidate above the trend. This could lead to a continuation of the Bull run and signal higher prices may yet be still to come.
For the next big move, be sure to tune in to tonight’s SNL.
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Dogecoin Daily Chart
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