Dogecoin: Buy The Rumor, Sell The News?

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Last Updated on 7 May 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / jeroen@cryptotips.eu
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Of course we’re big fans of Dogecoin, the shiba inu memecoin that started originally as a joke. Although most technical analysts and cryptofans are worried that Dogecoin is stealing the limelight of Bitcoin and Ethereum, but we have no problem to admit liking all the memes, videos and songs being brought out about Dogecoin.

Dogecoin has had quite the week again, surging to near 70 cents from a value of 13 cents only last week. Right now, it trades around 61 cents.

Advertentie.

Once the event passes

It comes as Tesla CEO Elon Musk is about to host NBC’s famous comedy show Saturday Night Live. When asked about it this week when he left a hotel in New York, Musk said that he has been a fan of SNL since childhood and therefore was indeed excited to host.

As to the questions of Dogecoin that were being shouted to him, Musk remained cool and calm, knowing full well that any quote of his could potentially shoot the coin up further.

YouTube video

At the moment of writing, Dogecoin has a market cap of some $76 billion, simply known from multiplying the number of coins by the price. That is an astonishing value of course, even more than the recently floated Coinbase company.

Therefore, keep in mind the old Wall Street saying: it is possible to buy the rumor and sell the news, meaning that although you may think that Dogecoin is going to continue rising, it could very well fall as SNL is about to start.

As per the official definition:

“Buy the rumor, sell the news” is a phenomenon that happens in most markets, particularly financial markets. When the trader buys an asset-based on this speculation, that constitutes the rumor phase of the strategy. Once the awaited event passes or the report is released, the proverbial news has been made public. The trader then dumps their positions and the market moves.

The last time there was such a hype over Dogecoin was on 20 April, or 420 in American English dates. That was known as DogeDay, and fans expected the coin to reach $1 already then (some even wished for 4 dollars 20 cents).

In fact, with all the hype being built around it, Dogecoin fell on 20 April. Beware therefore as the weekend edges closer, and don’t get caught out in the hype. But until then, much wow of course.