What happened

Dogecoin (DOGE 5.26%) has given up some ground in Tuesday's trading. The cryptocurrency's price per token is now down roughly 2.4% over the last 24 hours.

The pullback for Dogecoin comes despite gains for other leading cryptocurrencies. As of 5:30 p.m. EDT, Bitcoin was up roughly 3.9% over the previous day of trading, while Ethereum's Ether token was up roughly 1.7% across the stretch.

A dollar breaking up into blocks.

Image source: Getty Images.

So what

Rather than any big token or crypto-space news, Dogecoin's sell-off appears to be the result of investors taking profits on the heels of recent gains. Even with today's pullback, the token is still up roughly 8% over the last seven days of trading.

Increasing adoption for the cryptocurrency has improved its potential for long-term viability, and support from figures including Elon Musk and Mark Cuban has helped generate excitement among crypto investors. Dogecoin may have started as something of a joke, but its performance in 2021 has been nothing short of incredible. The token has surged more than 4,200% year to date.

Dogecoin now has a market capitalization of roughly $32 billion and is the 10th largest cryptocurrency by market capitalization.

Now what

Leading cryptocurrencies have been gaining favor as potential hedges against inflation and instability in international equities markets. While Bitcoin has built a value case based around digital scarcity and Ethereum is attracting attention thanks to application building on its blockchain network, charting Dogecoin's trajectory is more difficult. 

The token looks like a high-risk investment even within the context of the volatile crypto space, and it will likely continue to see volatile pricing swings. The cryptocurrency has no hard limit on coin mining, and its blockchain doesn't support app building. At the same time, that doesn't necessarily mean that Dogecoin's valuation won't climb significantly above current levels.