What happens to Dogecoin when the market is down?

Jan. 24, 2023, 1:44 p.m.

          When the market is bearish, Dogecoin tends to suffer from its lack of fundamentals or real value. As a result, it’s highly sensitive to market sentiment and generally tracks with Bitcoin. When Bitcoin prices fall, Dogecoin often follows suit in an amplified way due to its low liquidity and smaller trading volume. This can lead to panic selling among those who had bought into Dogecoin at higher prices and were hoping for a quick profit as well as more investors taking profits off the table rather than waiting out a possible recovery in price.

In addition, because Dogecoin has no intrinsic value beyond what people are willing to pay for it on exchanges there is little incentive for anyone holding onto their coins over longer periods of time when markets become bearish. Investors tend instead towards investing in assets that have tangible value such as stocks or bonds that generate income even during prolonged downturns or commodities like gold which hold their purchasing power better than fiat currencies over long periods of time. 

The combination of these factors leads to increased volatility which can cause significant losses for traders who are not properly prepared or experienced enough when dealing with cryptocurrency markets during times of decline. It also means that any potential gains made during bullish cycles will be eroded away quickly if proper risk management techniques aren't employed by traders prior to entering into positions with Dogecoins or other cryptocurrencies whose values may be subject to rapid declines without warning due to uncertain economic circumstances affecting all global markets alike - including crypto ones!


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