$DOGE
Understanding the intentions of the market makers
If you are Musk and you have 10 billion Dogecoin in spot market and 1 billion in available funds for trading, your immediate priority is to help Trump build America, making him the new founding father of the United States.
So what is your purpose for cashing out Dogecoin? The core idea is simple: to ensure that while Musk achieves his political goals, the stability of his core assets increases. His core assets are the stocks of Tesla and SpaceX, while assets like Dogecoin are the most marginal. Thus, it can be said that Dogecoin is entirely used to sacrifice for core assets, especially during times of crisis.
In other words, when Musk liquidates Dogecoin, it happens when he believes there is a serious crisis with his company's stock or political goals. This distribution can be extremely cruel, because after crashing the market, he can also buy back; he can consume all liquidity in both directions, because if Musk's company fails, Dogecoin becomes meaningless, just returning to its original state.
The core value of Dogecoin
In other words, Dogecoin is equivalent to SpaceX, Tesla, and PayPal weighted with N times leverage; this is the value of Dogecoin. It's similar to the ABS bubble back in 2008. When you buy Dogecoin, you are buying the debt of Tesla, except Musk doesn't have to pay you back. The price of Dogecoin fluctuates around this value; if you understand Tesla, you can play with Dogecoin.
We find an interesting point in the crypto world: Bitcoin has become a meme of the US stock market, about to become a meme of precious metals like gold, and Dogecoin has become a meme of Tesla.
Operational logic
Entry strategy
When bullish on the Dow and Nasdaq, buy Bitcoin casually; when bullish on Tesla, buy Dogecoin casually.
Risk warning
Currently, with a 10% pullback, the Dow, Nasdaq, and Tesla are still at high levels. Not only are there many bearish people, but there are also many potential black swans, such as wars, and many gray rhinos, such as tariffs, repatriation, non-farm payrolls, and Powell's speech in December. Tesla has doubled, Dogecoin has tripled; if Tesla drops 30%, Dogecoin could be cut in half at 60%, meaning 0.4 goes to 1.6. This is too simple; Musk doesn't need to call you for approval.
Exit strategy
The rise of Bitcoin has nothing to do with Dogecoin, but during a Bitcoin bear market, Dogecoin must also bear, because a bear market in the crypto world means there is no liquidity in the market, no retail investors, nothing at all. Therefore, you don't necessarily have to buy in a bull market, but you must sell at the end of a bull market, especially at the end of Bitcoin's bull market. The driving force of Bitcoin's bull market is essentially the overflow of global liquidity, and countries will not individually release liquidity when the US dollar interest rate is raised, so it can also be approximated as the overflow of the US dollar's interest rate cuts and balance sheet expansion. The end of the bull market is precisely the turning point of monetary policy, such as signals for interest rate hikes, balance sheet reduction signals, stopping interest rate cut signals, etc., followed by a large double top. Deceptively, the end of Bitcoin's bull market corresponds to the altcoin season, meaning the mid-point of the altcoin season is Dogecoin's last escape opportunity. Dogecoin is one of the very few coins that is logically related to the US stock market and global liquidity, just like Bitcoin and Ethereum.
Specific time examples
For example, now it is the end of 2024, and we know that there will be moderate interest rate cuts and balance sheet reductions in 2025. Currently, there is no information about balance sheet expansion, therefore the altcoin season will come in Q3 and Q4 of 2025 or even later. Dogecoin's peak escape will be in the second half of 2025. In other words, right now is the bottom; rising from 0.1 to 0.4 is the bottom, and falling back to 0.2 is still the bottom.
