The crypto market is green today, and Dogecoin is registering double-digit gains surging past the $0.1 mark. The surge is attributed to the $44B acquisition of Twitter by Elon Musk. The DOGE community is thrilled since the cryptocurrency could get a new lease of life through the social media platform.
At the end of trading time in New York, Twitter’s stock price rose 8% before its suspension pending a takeover by Elon Musk.
On Tuesday, the memecoin surged 8% when the billionaire showed the cause to purchase Twitter at a $54.20 share price. On Thursday, DOGE’s price surged 40% to $0.081 when Manchun Wong, a tech influencer, hinted at working with Twitter to prototype a crypto wallet. Wong was, however, not clear on which cryptocurrencies Twitter would support.
Dogecoin has always had a love-hate relationship with the billionaire spanning years. Over time Elon has touted the memecoin in numerous playful tweets that he claimed were ironic but later suggested a real working relationship with the meme coin developers. Musk’s tweets always have a ripple effect on the token’s price, a fact well-known by the Dogecoin community. Day traders on his Twitter have used his tweets to mark their entry into the market. In June, when Elon attempted to drop the Twitter deal by citing dubious Twitter user figures, DOGE reacted by falling to as low as $0.05.
Notably, such an attempt occurred when Saturday Night Live hosted the billionaire in May 2021; in anticipation of the event, DOGE surged to an all-time high of $0.72 and crashed over 90% a year later. Meanwhile, the Tesla and SpaceX CEO’s bid to buy Twitter had been mired in plot twists and drama for months, putting DOGE fans at the edge of their seats.
Software engineers Billy Markus and Jackson Palmer launched the meme crypto in 2013 to make fun of bitcoin and the many other cryptocurrencies boasting grand plans to take over the planet. Elon, however, is not the only celebrity endorsing the animal-branded coin. Snoop Dogg, Dallas Mavericks owner Mark Cuban, and Kiss bassist Gene Simmons have all publicly rallied behind DOGE in the past.
How high will Dogecoin go?
Elon Musk has been the thread linking Dogecoin to Twitter; this love-hate relationship is expected to thrive following the Twitter deal. But what impact will that have on DOGE prices?
DOGE’s price has been bullish this week and is already 100% up from its monthly low of $0.00574 after losing over 99% in the crypto winter. From a technical standpoint, Dogecoin’s surge shows signs of exhaustion as its price faces strong resistance.
The MACD histogram indicates increasing DOGE price momentum to the upside; the MACD line is moving above the signal line, suggesting a bullish trend. The William alligator trendlines agree with the upward uptrend. However, the 14-day reactive strength index indicates an overbought DOGE with a strong indication of a price reversal with plenty of room for downward price movement.
The rally has offered much-needed respite to long-term holders, but DOGE’s price movements on the daily chart show warning signals. Key indicators like the RSI reveal that the meme coin is severely overbought at the time of writing. DOGE is riding the Twitter wave, which will be detrimental when it subsides.
Looking at the Dogecoin protocol, it barely has any new functionality or code added to it.
Given its development and utility shortcomings, it is safe to conclude that the Dogecoin run-up is purely speculative.