November 17 2023

How large were cryptocurrencies affected by the Dogecoin price fall?


While Dogecoin is a cryptocurrency that started as a meme back in 2013, it is valuable to buy. Since its launch, Dogecoin’s price has skyrocketed to more than $40 billion. And recently, this 2022, Dogecoin price hits an all-time high, after which it begins to plummet.

The crash of Dogecoin price also affects large cryptocurrencies such as Polkadot, Bitcoin Cash, and even Ethereum, which also plummet. This price fall leaves many investors and financial experts investing in what truly happened to cause this price decrease.

After all, for every action, there is always a reason. In this article, we aim to demystify why other large cryptocurrencies were affected during one of the most significant Dogecoin price drops.

Elon Musk influence on the crypto market

One of the reasons large cryptocurrencies were affected by the Dogecoin price fall is Elon Musk. We all know Elon Musk, the multi-billion dollar tycoon with one of the biggest influences on the cryptocurrency market. Of all the cryptocurrencies in the market, Dogecoin happens to be Elon Musk’s favorite.

Moreover, Dogecoin has a huge supply of about 10 million being supplied each day. This made the Dogecoin price quite affordable, so there is a huge potential to make a quick buck if the price increases. And with Elon Musk backing on the Dogecoin crypto, many investors took advantage and invested in it for this sole reason.

Now, since most investors are in the crypto market simply because Elon Musk is a fan, with just a tweet from Elon Musk panic rises. Or no tweet at all could raise some major concerns in the hearts of investors who are heavily invested in Dogecoin.

Recently this year, Elon Musk swapped some of his crypto investment. This swap caused a chain reaction as many investors saw it as a red flag and wanted to pull out of the system. It got so bad that it affected Dogecoin, but investors in other large cryptocurrencies started liquidating their investment.

The bubble concern

Another reason why the Dogecoin price fall has also affected large cryptocurrencies is because of something called the bubble concern. Like Elon Musk’s influence over the crypto market can cause, many investors see the crypto market as a bubble.

The crypto industry is viewed as a bubble in the sense that it can burst at any time, leading to a major loss of investment by many investors. As such, the slightest form of threat will cause many investors to liquidate their crypto assets.

Having this in mind, with Dogecoin price hitting a record all-time high and now dropping in price, and fast at the same time, has left many investors concerned about a potential bubble burst.

Many investors’ mindset is that when Dogecoin hits an all-time high, and then its price falls like it did this year, it means the crypto has come to the end of its lifeline. So, they see it as a sign to quickly get out of the market before it falls so bad that liquidating assets will be impossible or too much of a loss.

Whales and investors cashing out profit on investment

Another reason why the Dogecoin price crash is affecting the price of other cryptocurrencies is that large institutions and crypto whales are selling their assets. With Dogecoin reaching an all-time high, many people will want to cash out to quickly make a profit on investment.

And if you understand anything about the law of supply and demand, when the price of a commodity is high, and everybody wants to sell that commodity to make a profit, the price will crash. The price will crash because the supply of the commodity will overpower the demand.

But not many investors understand this analogy of the law of demand and supply. This is simply because many people invest in the crypto market, not because they think it has any meaningful value.

Rather, they are investing in it because they hope to buy a pile of it, push the price up, and then sell off to make a quick buck. While you can make money trading cryptocurrencies this way, this shouldn’t make you panic selling your cryptocurrency.

Overall, note that the crypto market is fairly complex. So, these few reasons in this article may not be the only reason behind how the Dogecoin price fell. Other factors will affect the price of other large cryptocurrencies. For example, people lacking interest in buying large cryptocurrencies can cause their prices to drop.


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