Effect of the impact of market correlation on Dogecoin (DOGE)
The world of cryptocurrencies has experienced rapid growth in recent years, with many new and well -founded players participating. One of the most popular cryptocurrencies is Dogecoin (DOGE), a Peer-to-Peer digital currency born from Twitter’s meme in 2013. While DOGE has been followed over the years, investors often discuss its impact on the wider cryptocurrencies.
In this article, we examine how market correlation affects Dogecoint and what it means to investors to consider these factors when assessing possible risks and opportunities related to coin.
What is market correlation?
The market correlation suggests how two or more devices move, in response to changes in their own market. In other words, if one device tends to rise, the other is likely to follow the example. This phenomenon has significant consequences for investors who want to diversify their portfolio and minimize the risk.
Case of Dogecoin
Dogecoin’s market correlation is obvious if it examines its historical performance for the wider cryptocurrency market. Since its creation, DOGE has been trading in a consistently narrow range, often around $ 0.01-5.00. This relative stability can be a challenge for investors to assess the potential effects of major market fluctuations in their medals.
For example, during the 2017 Crypto Bubble Burst, DOGE experienced significant prices, at the top of all time, $ 0.073. However, despite this volatility, DOGE managed to keep it until the next correction. In contrast, other cryptocurrencies such as Ethereum (ETH) and Bitcoin Cash (BCH) were more influenced by market relapses.
How is market correlation affected by Dogecoint
The relationship between Doge and other cryptocurrencies can have a significant impact on price movements. When investor emotions are positive, the doge tends to follow an example, resulting in increased shopping activities and higher prices. In contrast, when investors become a bear, Doge often experiences a decrease in value.
For example, during the 2020 cryptographic collapse, the price of Doge fell from $ 1.20 to $ 0.10, while other cryptocurrencies, such as Ethereum and Polkad (DOT), have fallen even further. This significant drop in price can be attributed at least partly to the relationship with Bitcoin (BTC), which at that time was declined.
Effect on investors
Investors who consider investing in DOGE should take into account the relatively low market correlation. This means that if you are looking for more volatile tools, Doge is not the best choice. However, investors who prioritize stability and lower risk can find DIGE as a better option.
In addition, understanding the market correlation is essential for investors who seek diversification of their portfolio. By recognizing how different assets move, investors can better handle their risk and make sound investment decisions.
Conclusion
The impact of market correlation on dogecoin should not be underestimated. Although the relatively narrow range of DOGE and its historical stability provide some comfort for investors, it is essential to consider these factors when evaluating the possible risks and opportunities related to the coin.
As the cryptocurrency market develops further, understanding how different devices move, they become more important to competent investors who seek to exploit price movements. With a more nuanced approach to market correlation, investors can make more well -founded decisions that are in line with their investment goals and risk tolerance.
Recommendations
For DOGE investors who want to diversify their portfolio or handle the risk:
1.
