$DOGE
Understanding the intentions of the major players
If you were Musk and you had 10 billion Dogecoins in cash and 1 billion in spare cash for trading, your immediate priority would be to help Trump build America, becoming the new Founding Father.
So what is your Dogecoin cash-out used for? The core purpose is simple: to ensure that while Musk achieves his political objectives, the stability of his core assets increases. His core assets are the stocks of Tesla and SpaceX. Dogecoin, being a marginal asset, can be said to serve as a sacrifice for these core assets, especially in times of crisis.
In other words, Musk cashing out of Dogecoin occurs when he believes his company's stock or political goals are in serious crisis. This distribution can be extremely ruthless because after crashing the market, he can also buy back in. He can consume all liquidity in both directions because if Musk's companies fail, Doge becomes meaningless, just returning to its original state.
Core value of Dogecoin
In other words, Dogecoin is equivalent to SpaceX and Tesla and PayPal weighted with a multiple of leverage. This is the value of Dogecoin. It is similar to the ABS bubble in 2008; when you buy Dogecoin, you are essentially buying Tesla's debt, 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 will find an interesting point in the crypto world: Bitcoin has become a meme of the US stock market and is about to transform into a meme of precious metals like gold, while Doge has become a meme of Tesla.
Operational logic
Position building method
When bullish on the Dow and Nasdaq, also buy Bitcoin; when bullish on Tesla, also buy Doge.
Risk warning
Currently, with a 10% pullback, the Dow, Nasdaq, and Tesla are still at high levels. Not only are there many bears, but potential black swan events are also numerous, such as wars and gray rhinos like tariffs, deportations, non-farm payrolls, and Powell's speech in December. Tesla has doubled, and Doge has tripled; if Tesla drops 30%, Doge will be halved by 60%, from 0.4 to 1.6. This is too simple; Musk doesn't need to consult with you on this.
Delivery method
Bitcoin's rise is unrelated to Dogecoin, but during Bitcoin's bear market, Dogecoin must also be bearish. This is because a bear market in the crypto world means there is no liquidity, no retail investors, and nothing at all. Therefore, it's not necessary to buy during a bull market, but it's essential to sell at the end of a bull market, especially at the end of Bitcoin's bull market. The drive of Bitcoin's bull market is essentially a spillover of global liquidity, and countries will not independently inject liquidity when the dollar is experiencing interest rate hikes, so it can also be approximated as a spillover from dollar interest rate cuts and balance sheet expansions. Thus, the end of a bull market signifies precise shifts in monetary policy, such as signals for interest rate hikes, balance sheet reductions, stopping interest rate cuts, etc. The next move will be a double top. It is highly deceptive that the altcoin season coincides with the tail end of Bitcoin's bull market, meaning that the mid-point of the altcoin season is Dogecoin's last peak opportunity. When the altcoin season starts, Dogecoin is already at a high-risk level, as it is one of the few cryptocurrencies that logically correlates with both Bitcoin and the global liquidity like the US stock market.
Specific time examples
For example, now it is the end of 2024. We know that there will be moderate interest rate cuts and balance sheet reductions in 2025. Currently, there is no information on balance sheet expansion, so the altcoin season will arrive in 2025 Q3 Q4 or even later. Thus, the peak for Dogecoin will likely be in the second half of 2025. In other words, we are currently at the bottom; a rise from 0.1 to 0.4 is still the bottom, and a drop back to 0.2 is still the bottom.