Is Dogecoin a Buy Right Now for Just $0.17? Here Is What History Suggests.

There are many different ways to invest in cryptocurrency

For those who want direct exposure, some of the more opportunities include in Bitcoin or Ethereum

By contrast, some may choose a more passive route -- in public companies such as Coinbase Global, Circle, or Robinhood, whose respective models touch the cryptocurrency landscape in a variety of ways

There are plenty of other choices beyond the main stocks and cryptocurrencies referenced above, however

In recent years, one cryptocurrency that has burst onto the scene is Dogecoin (DOGE 1

Let's explore the rise in Dogecoin's ity

More importantly, let's explore some patterns in the crypto's price action during the last several years

Why did Dogecoin's price rise so sharply

In my eyes, Dogecoin's sharp rise can be tied to the outcome of the presidential election

Ing Donald Trump's victory in early November came the creation of the Department of Government Efficiency (DOGE)

Tesla Chief Executive Officer Elon Musk was initially tasked with managing the DOGE initiative

In years past, Musk has jokingly touted Dogecoin on several occasions -- from posting memes on social media to incorporating references to the cryptocurrency during his appearance on Saturday Night

I think the DOGE moniker used by the Trump administration, combined with Musk's perceived interest in Dogecoin specifically, fueled a hype narrative that suggested Dogecoin could be worth buying

Image source: Getty Images

What does history suggest could happen to Dogecoin

The chart below illustrates Dogecoin's price during the past five years

After sifting through the various peaks and valleys seen below, investors can begin to form some critical insights

While history is not a guarantee of future results, it can still be a good reference point

In my view, the current price of Dogecoin could suggest that a run-up is right around the corner

But as I alluded to above and the chart dynamics make, any increase in Dogecoin's price from here will ly be met with a ceiling soon thereafter and ed by a precipitous sell-off

Is Dogecoin a buy right now

Given the ideas explored above, I would say that Dogecoin is on the higher end of the risk spectrum when it comes to in cryptocurrency

Un Bitcoin or Ethereum, Dogecoin is a meme coin and doesn't offer much in the way of real-world utility

In fact, Musk himself even said that the U

Government does not plan to utilize Dogecoin in any way that he is aware of

When you factor that into the equation, any potential ties between DOGE and Dogecoin disappear -- damping the recent excitement that fueled Dogecoin in the first place

While I do think Dogecoin could climb higher from its current levels in the short term, I'd caution investors from getting caught up in a momentum trade

Smart investors understand the risk of buying at the wrong time and ending up holding the bag

In the long run, I don't see Dogecoin as a viable opportunity in the crypto landscape and think it is best avoided

Adam Spatacco has positions in Tesla

The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Tesla

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