If you're playing with indexes and boring names, this market probably doesn't bother you too much. If you are trader, it's become death by a thousand papercuts or as Helene Meisler said, "Death by a thousand paper hands." Momentum money continues to flee in cryptocurrencies, specifically Dogecoin and Ethereum.
To some degree I understand the move into Ethereum as smart contracts are all the rage thanks to non-fungible tokens (NFTs). I'd be willing to wager that many of the current buyers don't understand the risk of a move from proof of work to proof of stake in Ethereum, but when it finally comes to fruition it's anyone's guess as to how it actually plays out. That may be the reason for the biggest disconnect between bitcoin's value over the years and Ethereum.
Dogecoin simply continues the trend of essentially worthless things becoming valued at hundreds of millions, or in this case, tens of billions. The move higher is devoid of logic beyond the Greater Fool Theory, but if buyers can push GameStop (GME) into the $400s and Koss (KOSS) over $100, not to mention the myriad of penny stocks that have recently roundtripped to the teens and back, then why not Dogecoin?
When asking yourself how cults can be so successful or how a cult leader can convince dozens of people to take their own lives, we're witnessing thousands of investors about to take their own financial lives listening to social media. Maybe I'm wrong and Dogecoin becomes a new standard of currency, but neither logic nor economics support a thesis that will happen.
What we do know is momentum traders remain on this micro-focused obsession of trending meme stocks or meme crypto much longer and much higher than traditional traders can rationalize. It's the picture-perfect example of how a market can stay irrational longer than individuals can stay liquid. The gambling-trader side of me applauds those that have ridden the Dogecoin and meme stock trades higher. It's anything but easy if you hold anything less than a lack of experience or the highest level of risk tolerance.
Speaking of risk, it is all off right now in anything that isn't big, boring, or industrial in nature. Without a bounce this afternoon, we are looking at some very ugly, very broken charts, especially in tech land. The constant drip is the death by papercuts. We're not set up for a whoosh. Instead, we're getting the monotonous lower by a little bit every single day leaving some investors to query, "This can't go on forever, right?" Well, remember back to that market irrationality from above. I assure you the drops can continue longer and more consistently than you believe is possible. This is no different than the irrational rises we've experienced for months out there.
Protecting capital is job one. Pick your spots but don't get stubborn. The market isn't forgiving here in the least.