Doge 10 dollars? An analyst predicts it, but …

Juan José del Pozo, better known as Tusam, was an Argentine hypnotist and magician who used to warn before each magic trick: “You can fail.”

That phrase became so known that in Argentina it is used daily to describe challenging situations. And that same warning seems to fit perfectly with the innumerable price predictions that circulate on social networks, as one that predicts that Dogecoin (Doge) will reach $ 10 in this cycle.

Although it is a such striking prediction As unlikely, for the influencer that is identified in X as “capital doge”, who is defined as a financial educator, the longest memecoin in the market has enough energy to run to levels never seen before.

To get to that conclusion, he compared the historical price cycles of Bitcoin (BTC) and Dogecoin (Doge), focusing on what happens after the currency created by Satoshi Nakamoto closes a weekly sail in historical maximums (ATH).

Its publication is accompanied by a graph in which the price increases that Doge experienced after BTC closed weeks in ATH, in 2017 and 2020. On that occasion, the memecoin whose icon is a dog Shiba Inu experienced price increases of price of 94% and 190%, respectively.

Currently, it has confirmed a weekly closure above its previous historical maximum. That is, if the story is repeated, Dogecoin could overcome its previous performance and mark a new financial milestone. «The last two times that Bitcoin reached new maximums, Dogecoin not only went up, but shot. To the moon! ”Says Doge Capital.

Although Doge Capital supports its prediction with technical analysis tools and comparing historical patterns to give it greater credibility, the truth is that it is an unlikely projection, at least for this cycle. To take dimension how exaggerated this projection is enough to see the Doge price chart. At the time of the publication of this note its price is 0.22 dollars, so It should increase more than 4,400%!

In addition, the story has repeatedly demonstrated that these price predictions almost always fail due to a simple statistical issue: if there are dozens of predictions about an asset that predict different things … obviously not all of them can be right.

But let’s see why it is very unlikely that dogs reach the level of 10 dollars in the short term.

The first has to do with a key concept in the financial world: market capitalization. It is the total value of an asset in circulation.

This metric allows to know what the size and position of the asset in the market is. It is calculated by multiplying the current price of the cryptocurrency, in this case Doge, by the total number of currencies in circulation. For example, if an asset has a price of 2 dollars and there are 1 million coins in circulation, its capitalization will be 2 million dollars.

In other words, if the Doge price reaches 10 dollars, its market capitalization will be 1,494 billion dollars (Trillionsin English). To put in perspective, if memecoin reached that market capitalization, It would become the most valuable active active. It is something too unlikely to happen.

While it would not cease to be fun that a viral internet puppy is worth more than a firm like Tesla, it must also be noted that many of these predictions overlook market capitalization. Maybe, and this is a sensation more than a fact, that metric is set aside because it just demolishes any astronomical projection.

After all, as Tusam said: “You can fail.” And if one takes time to calculate market capitalization, it almost always fails.

Institutional money flows to Bitcoin, not towards Dogecoin

An issue that does not mention capital in its analysis is that, in this cycle, It was clearer than ever than BTC and cryptocurrencies are not the same. One sample is that institutions are massively turning their money to add Bitcoin (and not Altcoins, mostly) to their treasury as a reserve asset.

As Cryptonoticia, Strategy (previously Microstrategy) reported is the company that popularized this trend from its aggressive BTC accumulation model. The firm directed by Michael Saylor, a Bitcoiner maximalist, began with BTC’s purchases in 2020. At present, it is the company that lies in the stock market with more BTC in its treasury.

This is important to point out because, without the massive entry of large investors, it is practically impossible for Doge to accumulate that volume of capital that needs to take up to 10 dollars.

While Dogecoin is only associated with speculative movements and viral trends, he will not have an attraction for those who handle large volumes of money.

And here it is important to stop a few moments to understand why Bitcoin does manage to capture that institutional capital. Unlike Doge, BTC has a limited supply to 21 million units, whose broadcast is reduced every 4 years in an event known as halving. This scheduled shortage is one of the many factors that influences its medium and long term price.

Doge, on the other hand, does not have a maximum emission limit, so its offer grows constantly. This inflation can play against its ability to accumulate long -term value. Especially, if it is not accompanied by a sustained increase in demand or solid foundations that support its adoption.

In addition, BTC has the advantage of the first movement. It is simple, because it is the first digital asset, it managed to establish itself as a reference within the ecosystem, consolidate a loyal user base and build a reputation that gives it a dominant position. It is an early combination and adoption that is very difficult to replicate for any other project, however innovative it is.

Another important issue is that BTC is considered by many investors as “digital gold”, by its decentralization and resistance to the censorship of banks and governments. While Doge also shares these characteristics, It did not build the same narrative or perception of value.

Likewise, it should be noted that Bitcoin has managed to develop an entire ecosystem with exchanges, payment catwalks, custody services, funds quoted in the cash in cash (ETF) and solutions for institutions. None of that exists on the same scale (yes on a smaller scale) for the Altcoins, such as Doge, nor are there clear motifs to develop. In the particular case of memecoins, they depend on the speculation or support of some celebrity. To give an example, one of the few foundations that Dogecoin has is its relationship with Elon Musk, the CEO of Tesla, who has frequently promoted its popularity through publications in X or public statements.

For this reason, it is essential to understand that technical analysis and price projections They cannot be disconnected from common sensemarket capitalization, macroeconomic context, trends of the moment (institutional adoption), or the characteristics of an asset.

And surely, if these factors are ignored, the price projection may fail. As much as an analyst makes hundreds of lines in a graphic, if the dog does not have enough energy to run, it can hardly jump to catch the Frisbee of 10 dollars.

As Tusam said: “You can fail.” And that warning never hurts to not get carried away by the charm of a price prediction, however tempting it seems.

To what price can Doge really arrive?

Now, if the macroeconomic context accompanies and there is a rebound for appetite for the risk among investors, a more realistic projection is that Doge recovers the $ 0.30 area. That level worked as a strong support between December and February.

If the appetite for the risk intensifies, Doge could take enough impulse to look for $ 0.45. Given this scenario, many traders could begin to position themselves with the expectation of a rising upward, which would further feed the volume and volatility around the most valuable memecoin on the market.

However, it is key to take into account that levels such as 0.50 or 0.60 dollars could act as areas of strong resistance, where there are probable profits of earnings that stop that progress.

Many project that Doge can reach the dollar. While the road will be arduous, due to the great flow of money that must be entered, it would not be crazy if the macroeconomic context becomes very optimistic for the “risk” assets (and it would be much more realistic than the 10 dollars that some tweeters forecast).

Discharge of responsibility: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of cryptootics. The author’s opinion is informatively and under no circumstances constitutes an investment recommendation or financial advice.