Importance of economic indicators in the evaluation of dogecoin (DOGE)
Dogecoin, decentralized cryptocurrency and Meme token, investors and fans are the attention of both. Although its value may fluctuate wildly, understanding the underlying economic indicators can help make the purchase or sale of DOGE.
What are economic indicators?
Economic indicators are indicators that provide insight into the health, growth and stability of the economy. They may be quantitative (such as GDP, inflation rate) or qualitative (such as interest rates, consumer confidence). By analyzing these indicators, investors can better understand the general direction of their investments.
Why do you analyze Dogecoin’s economic indicators?
Dogecoin’s value was notoriously volatile, prices ranging from $ 0.01 to $ 700. You need to examine its economic indicators in order to evaluate the potential of DOGE growth or relapse. Here are some key factors that need to be considered:
- GDP (gross domestic product) growth rate : The growth rate of strong GDP may indicate a healthy economy, which can mean the need for DOGE as investors are looking for stable and secure investments.
- Inflation rate : The inflation rate above 3% can worsen the purchasing power of cryptocurrencies such as DOGE, making them less attractive to some investors. In contrast, a low inflation rate can attract more customers.
- Unemployment rate : A low unemployment rate indicates a strong labor market that can increase economic growth and increase demand for DODE.
- The Consumer Confidence Index (CCI) : An improving CCI may suggest that consumers are optimistic about the economy, which results in increased doge requirements.
- Interest Foots
: Changes in interest rates may affect the value of cryptocurrencies such as doge. Higher interest rates can reduce demand and reduce prices.
Economic indicators of Dogecoin
To evaluate dogecoin, we need to examine its current economic indicators:
- GDP growth rate (number 2020) : According to Cryptoslate, the growth rate of Dogecoin GDP has been steadily increasing since Q4 2019. This refers to the growing economy and the potential need for DIGE.
- Inflation rate (January-March 2020) : The inflation rate was 1.7%during this period. Although it is not directly compared to DOGE, this indicates that the economy is experiencing a certain level of growth.
- The unemployment rate (quarter 2019)
: According to Glassdoor, the unemployment rate was around 6%in December 2019, indicating a strong labor market.
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Conclusion
Although Dogecoin’s economic indicators cannot be as robust as traditional cryptocurrencies such as bitcoin or Ethereum, they can still provide a valuable insight into growth potential. By analyzing these indicators and other factors, such as market emotions, trading volume and acceptance rates, you can better understand whether DOGE is the option to buy or sell.
Recommendations
If you consider buying DOGE, look for indicators that indicate growing economy and demand for growing cryptocurrencies. Some specific scenarios to be taken care of:
- Strong GDP growth rate (such as 3%+ compared to the same period of previous year)
- Low inflation rates (such as <1%)
- To improve unemployment rates
- Positive consumer trust indices
On the other hand, if you consider selling DOGE, focus on indicators that suggest a reduction in economic activity or increased uncertainty.