Dogecoin could post significant gains as speculation around the meme coin mounts.
Key Takeaways
- Dogecoin has risen by more than 30% over the past 36 hours.
- The bullish impulse came as Twitter (NYSE:TWTR) confirmed that Elon Musk had become the company's sole shareholder.
- Further upward pressure could see DOGE rise to $0.23.
Dogecoin has broken out on the news that Elon Musk has acquired a 100% stake in Twitter. While speculation mounts, the leading meme coin could gain further momentum to enter a new uptrend and reach higher highs.
Dogecoin Breaks Out
Dogecoin has gained significant bullish momentum following Elon Musk’s Twitter acquisition.
The social media giant confirmed late Monday that it had accepted Musk’s offer and sold the company’s shares at $54.20 per unit in a transaction valued at around $44 billion. The shares were priced at a 38% premium to TWTR’s closing price on Apr. 1, 2022.
In the press release announcing the news, the Tesla (NASDAQ:TSLA) and SpaceX CEO explained his decision to buy an entire stake in the platform by saying that he wants to unlock Twitter’s “tremendous potential.” He also promised to improve Twitter by “enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans.”
Dogecoin, the meme coin that Musk owns as part of his crypto portfolio and has endorsed on Twitter on multiple occasions, has benefited from the Twitter buyout news. One explanation for the rally is the mounting speculation that Twitter could soon accept the meme coin as payment for its premium services.
Musk posted a series of tweets earlier this month discussing Twitter’s paid service, saying that the app could add support for Dogecoin payments. “Maybe even an option to pay in Doge?” he wrote. Tesla began accepting Dogecoin payments for merchandise earlier this year.
As is often the case with significant Musk-related news events, Dogecoin has skyrocketed by 30% over the past 36 hours as the buyout rumors started to emerge and may have more room to rise. The meme coin appears to have broken out of a falling wedge, which anticipates a price increase of more than 68%. A sustained daily candlestick close above $0.16 could encourage sidelined investors to re-enter the market, pushing the asset to $0.23.
Nonetheless, Dogecoin is subject to high speculation and has suffered severe drawdowns in the past. Despite re-entering the top 10 cryptocurrencies by market cap after its recent run, it’s still almost 80% short of its all-time high recorded in May 2021.
Any downswings below the $0.13 level could generate panic among speculators and encourage them to exit their positions. A spike in selling pressure could send Musk’s favorite meme coin to $10, or even $0.06.