Elon Musk has made Dogecoin a ‘hot buy’ all over again

Key Takeaways:

  • The Musk-Twitter saga might be leading to a happy conclusion.
  • Musk's Twitter plans might include Dogecoin somewhere, providing a strong bullish cue for the token.
  • Meanwhile, DOGE prices recovered a bit from Oct 10's fall.
Elon Musk meets Dogecoin image
Elon Musk meets Dogecoin image

NEW DELHI (CoinChapter.com) — Elon Musk’s latest machinations involving Twitter might have a bullish impact on the Tesla CEO’s favorite meme token Dogecoin (DOGE).

After many twists and turns, including a (now-postponed) trial, Musk has decided to fulfill his earlier promise of buying the social media platform for $44 billion. To recap, in July, the SpaceX boss did a 180-degree on his April agreement with Twitter.

Musk cited Twitter bots as the reason behind his changed decision. Reacting to Musk’s change of heart, Twitter sued the billionaire, and he counter-sued the firm.

In yet another turn to this twisting saga, the Tesla CEO did another 180 (or a 360 now, maybe) and asked the courts to postpone the trial while he secured financing for the deal. Investors had kept a keen watch over the stock prices of both Twitter and Tesla during the entire back-and-forth episode.

However, when it comes to Musk, it’s important to remember that even the most unrelated-to-crypto decisions of the Dogefather have an impact on DOGE prices.

Musk, DOGE, And Tweets

Dogecoin prices have historically been sensitive to anything Elon Musk says or does, even if it isn’t crypto-specific. Nevertheless, the billionaire has been a vocal supporter of the meme token, even allowing for DOGE payments for some Tesla merchandise.

However, DOGE’s reaction to the Dogefather’s tweets and comments also landed Musk in some trouble. In June this year, an aggrieved investor sued Elon Musk, along with Tesla and SpaceX, for $258 billion. The lawsuit came after a marketwide sell-off took crypto investors to the cleaners.

Elon Musk was sued for alleged manipulation of DOGE prices
Elon Musk was sued for alleged manipulation of DOGE prices. Source: Twitter

Now, with Musk’s Twitter move, speculations suggest the billionaire plans to incorporate DOGE somewhere.

Also Read: KAVA price risks ‘sell the news’ crash of 80% ahead of upgrade launch

A document submitted in discovery during the Musk v/s Twitter trial contained the records of texts between Elon Musk and other noted figures like Jack Dorsey, board chair Bret Taylor and current Twitter CEO Parag Agrawal.

The texts reveal more of Musk’s questionable ideas for Twitter, which earlier included verifying human users and open-sourcing the targeting algorithm of the platform. However, the Tesla CEO might consider making people pay DOGE to tweet. The idea is to combat spamming using bots.

I have an idea for a blockchain social media system that does both payments and short text messages/links like Twitter. You have to pay a tiny amount to register your message on the chain, which will cut out the vast majority of spam and bots. There is no throat to choke, so free speech is guaranteed

Musk said

Although vague at first, the idea takes a more concrete shape in a conversation with Steve Davis, president of The Boring Company. Musk told Davis his plan B was to create a “blockchain-based version of Twitter,” which will have tweets embedded in the transaction of comments.

So you’d have to pay maybe 0.1 DOGE per comment or repost.

A blockchain-based Twitter might solve many problems facing the platform regarding freedom of speech, etc., but it will be a major bullish tailwind for DOGE prices. This is because transactions of the meme token are fast and cheap, making it quite ideal as a means of exchange.

Conceived as a joke, Dogecoin has been establishing itself as serious crypto with multiple use cases.

DOGE Prices Rebound From Ascending Trendline Support

Meanwhile, DOGE prices recovered slightly from their 4.3% fall on Oct 10. The meme token rebounded off multi-week ascending trendline support. However, the 20-day exponential moving average (20-day EMA, red wave) arrested the DOGE prices uptrend.

Rumors of Musk’s plans to incorporate DOGE in his dream of an idea Twitter result in a FOMO buying spree. Hence, DOGE prices would move above the 20-day EMA (red wave) and 50-day EMA (purple wave) to challenge resistance near $0.064.

Moving above immediate resistance could help Dogecoin target resistance from its 100-day EMA (blue wave) near $0.067 before retreating.

DOGEUSD daily chart with ascending trendline support and RSI.
DOGEUSD daily chart with ascending trendline support and RSI. Source: Tradingview.com

But, the long upper wick on Oct 12’s daily candle suggests a strong presence of bears. Hence, DOGE prices risk invalidating ascending trendline support and falling to $0.057. Moreover, a marketwide sell-off could see DOGE prices fall more than 10% from current levels to $0.054.

Meanwhile, the relative strength index for Dogecoin remains neutral, clocking at 46.85 on the daily timeframe.

While you are here, read here to learn more about a danger to the fragile US economy that could likely cripple it.

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