- Dogecoin surged by circa 140 percent this week as a new TikTok challenge urged users to pump it to $1.
- The meme cryptocurrency is still trading about 1,800 percent below its viral price target.
- Meanwhile, Malta-based Binance announced today that it would launch DOGE/USDT Perpetual Contract with up to 50x leverage.
It was all a joke for Dogecoin.
The meme cryptocurrency started rallying earlier this week as a new TikTok challenge urging users to push DOGE/USD to $1 went viral. Launched by user James Galante, the video received more than 600,000 views. The challenge also started trending on Twitter.
“Let’s all get rich!” Galante said on July 2. “Dogecoin is practically worthless. There are 800 million TikTok users. Once it hits $1, you’ll have $10,000.”
The outcome was a price explosion. The DOGE/USD exchange rate rallied by more than 140 percent in just two days of trading. Meanwhile, the 24-hour volumes of Dogecoin-enabled instruments skyrocketed by circa 690 percent from its mean level.
Even the Dogecoin’s official Twitter account warned people against joining the TikTok challenge, urging followers to “be smart.”
Be mindful of the intentions people have when they direct you to buy things. None of them are in the spot to be financially advising.
Make choices right for you, do not ride other peoples FOMO or manipulation.
Stay safe. Be smart.
— Dogecoin (@dogecoin) July 8, 2020
But Then Comes The Corporate
The TikTok challenge was looking to calm down into the Thursday trading session. Dogecoin corrected by almost 30 percent from its week-to-date top of $0.0056. Nevertheless, as one hype ended, another one took over to extended the joke rally.
Dogecoin turns positive for the day after the Binance announcement. Source: TradingView.com
Malta-based cryptocurrency exchange Binance announced today that it would launch DOGE/USDT Perpetual Contract with up to 50x leverage. The derivative would allow traders to place leveraged bets on the Dogecoin spot rate. Users with a $1 investment capital will be able to buy up to $50 worth of DOGE/USDT contracts.
Teddy Cleps, a cryptocurrency-focused market analyst, saw Binance’s announcement as a beginning of a “massacre,” stating:
“Already imagining 1000s of people buying DOGE with 50x leverage in hope to ride it all the way up to $1.”
A Dogecoin Price Rally Ahead?
Dogecoins’ market outlook remains indefinable. Its ashes-phoenix rise comes out of FOMO – a backronym for Fear of Missing Out. Traders bought it to dump it at a higher rate. Otherwise, Dogecoin does not serve any concrete purpose in the larger context of the cryptocurrency sector.
With that said, DOGE/USD may rally because of the ongoing altcoin hype, further propelled by the Binance perpetual contract announcement. But the hype is not worth of investors with lower risk appetite, given it clearly lacks the basic fundamentals.
“Tik Tok users can pump DOGE to $1 but I’ll probably take profits by $0.02,” said Josh Rager, a cryptocurrency analyst. “What can I say, I’m risk-averse and won’t complain about 600% gains.”
The joke has just gone serious.