Elon Musk pours cold water on Dogecoin’s Twitter adoption hopes

Key Takeaways:

  • Dogecoin drops 11% after Elon Musk backs out of the Twitter deal.
  • Twitter threatens to sue the billionaire, dampening Dogecoin supporters' hopes for adoption.
  • DOGE/USD boasts a bullish setup.
Dogecoin, Elon Musk pours cold water on Dogecoin’s Twitter adoption hopes
image from medium.com

YEREVAN (CoinChapter.com) – Dogecoin (DOGE) dropped 11% since July 8, when ‘dogefather’ Elon Musk announced his intention to back out of the $44 billion Twitter deal.

Why does the Twitter deal bother the Dogecoin army?

The billionaire’s pet crypto heavily depends on public mentions and tweets, feeding off the hype. For example, the digital asset pumped 20% after Twitter agreed to Musk’s buyout deal.

Musk previously hinted that Doge could become a crypto payment on Twitter. Thus, the Dogecoin ‘army’ had high hopes for broader adoption.

Also read: Elon Musk reiterates support for Dogecoin, despite the $258bn lawsuit.

However, the looming lawsuit rained on Dogecoin’s parade as Musk faced legal action for his bail on the proposal.

Legal battle ahead for Musk?

In detail, the entrepreneur cited a lack of disclosure from Twitter in its assessment of spam, bots, and fake accounts on the platform. The SpaceX CEO had paused the Twitter deal in May over the same concerns and stated that the Twitter team failed to disclose sufficient information on the matter.

The agreement termination letter by Musk’s legal team stated that “Twitter is in material breach of multiple provisions of the Merger Agreement.”

In short, Twitter has not provided information that Mr Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Musk’s original requests.

read the letter.

Also read: Twitter shareholders sue Elon Musk for manipulating stock price

As a result of Musk’s “chaotic” behavior, Twitter hired U.S. law firm Wachtell, Lipton, Rosen & Katz LLP to sue the entrepreneur. Ann Lipton, a professor of corporate governance at Tulane Law School, commented on the matter, calling the Twitter board’s position “difficult.”

They can’t just say, ’Alright, let’s spare us the pain, Elon we’ll let you knock the price down by $20 per share, or we’ll settle, we’ll agree to walk away if you just pay the billion-dollar break fee. I mean, Twitter is just not in a position to be able to do that.

said the expert.

What about DOGE?

While Musk’s multi-billion Twitter deal unraveled, Dogecoin supporters saw the token drop 11%. As a result, the DOGE/USD exchange rate stood at $0.064 on July 11.

As CoinChapter reported, Dogecoin boasted a Falling Wedge on the daily chart, active since Aug. 2021. The formation features two converging trendlines with a negative slope. The price gradually declines after consecutive support and resistance retests.

Dogecoin (DOGE) daily chart featuring a Falling Wedge. Source: TradingView.com
Dogecoin (DOGE) daily chart featuring a Falling Wedge. Source: TradingView.com

However, the Falling Wedge is a bullish reversal pattern. I.e., it promises an upside move after breakout above the resistance.

Also read: Memecoin news: DOGE and SHIB falter as bears move in

Moreover, the estimated move equals the maximal distance between the trendlines. Thus, the target DOGE price would be approximately $0.25, or nearly 300% above the current value. Meanwhile, a scenario where Dogecoin defies the overall market trend appears unlikely.

Could bullish technicals save DOGE? Making solid predictions while dealing with meme coins might not pay off. However, betting on Elon Musk’s tweets appears safer. The CEO shrugged off the lawsuit threat with another tweet, possibly boosting the DOGE supporters’ confidence.

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