Dogecoin Is Sinking Today -- Is the Cryptocurrency a Buy Right Now?

Key Points

• Dogecoin's token price is heading lower today in conjunction with pressures impacting the broader crypto market.
• Investors are taking profits following recent gains and responding to risks that could pressure the crypto market this year.
• Dogecoin and other cryptos could continue to benefit from political catalysts, but the outlook on inflation and interest rates is a big risk factor.
• 10 stocks we like better than Dogecoin ›

Dogecoin (CRYPTO: DOGE) is getting hit with another round of selling pressure. As of noon ET, the cryptocurrency had fallen 7.8% over the past 24 hours of trading. Over the same period, Bitcoin and Ethereum had fallen 1.8% and 4.8%, respectively.

Along with the broader market, Dogecoin is losing ground today as investors weigh valuation concerns following gains in recent months and the possibility that the Federal Reserve will wind up pushing out its schedule for interest-rate reductions. As of this writing, Dogecoin is now down roughly 3% over the last week of trading.

Image source: Getty Images. ## Is Dogecoin a buy right now?

Despite some recent pullbacks recently, the broader crypto market has enjoyed strong bullish momentum this summer. Gains have come from the passage and legislative advancement of crypto-related legislation and moves from the Trump administration to support the crypto industry. Dogecoin is still up 22% since the beginning of June, even though its token price is down roughly 14% from its high mark across the stretch.

Dogecoin is the market's leading meme coin and has achieved impressive levels of adoption and longevity, despite having little in the way of a fundamental-valuation case. With indications that the crypto industry will continue to see strong support under the current presidential administration, there's a good chance that new bullish catalysts for Dogecoin and the broader cryptocurrency space will continue to roll out over the next several years.

On the other hand, there's a possibility that higher levels of inflation will make it harder for the Fed to cut rates. If so, that could hurt crypto valuations.

For long-term crypto investors, continuing to buy Dogecoin and other preferred tokens on pullbacks could be the right move. However, investors who are concerned about the potential for significant downside volatility through the rest of the year may want to hold off right now or only back the safest tokens with the strongest fundamental-valuation cases.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Dogecoin Is Sinking Today -- Is the Cryptocurrency a Buy Right Now? was originally published by The Motley Fool

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