Musk Bought Twitter. Of Course Dogecoin Reacted

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Musk Bought Twitter. Of Course Dogecoin Reacted
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key takeaways

Dogecoin is up more than 30% in the past 36 hours. The bullish impulse came from Twitter confirming that Elon Musk had become the company’s sole shareholder. Further upward pressure could take DOGE to $0.23.

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Dogecoin broke on the news that Elon Musk bought 100% of Twitter. While speculation increases, the leading meme coin is likely to gain further momentum, entering a new uptrend and reaching higher highs.

Dogecoin breaks out

Dogecoin has gained significant bullish momentum after Elon Musk acquired Twitter.

The social media giant confirmed late Monday that it had accepted Musk’s offer and sold the company’s stock at $54.20 per share, in a deal valued at about $44 billion. The stock is priced at a 38% premium to TWTR’s April 1, 2022 closing price.

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In a press release announcing the news, the Tesla and SpaceX CEO explained his decision to buy an entire stake in the platform and said he wanted to unlock the “tremendous potential” of Twitter. He also promised that he would improve Twitter by “enhancing the product with new features, open-sourcing algorithms to increase trust, defeating spam bots, and authenticating everyone.”

Dogecoin, the meme coin owned by Musk as part of his crypto portfolio and endorsed on Twitter several times in the past, benefited from the Twitter acquisition news. One explanation for the rally is growing speculation that Twitter may soon accept meme coins as payment for its premium services. Earlier this month, Musk posted a series of tweets discussing Twitter’s paid service, saying the app could add support for Dogecoin payments. “Maybe there is even an option to pay with the Governor?” he wrote. Tesla started accepting Dogecoin as payment for goods earlier this year.

As with the big news events related to Musk, Dogecoin has surged 30% in the past 36 hours as acquisition rumors start to emerge, and there may be more upside. The meme coin appears to have broken out of a falling wedge, with an expected price increase of over 68%. A sustained daily candlestick close above $0.16 could encourage wait-and-see investors to re-enter the market, pushing the asset up to $0.23.

Source: TradingView

Still, Dogecoin is subject to a high degree of speculation and has suffered brutal declines in the past. Despite re-entering the top 10 cryptocurrencies by market cap after its most recent run, it is still nearly 80% below its all-time high set in May 2021.

Any dip below the $0.13 level could spark panic among speculators and encourage them to unwind their positions. A surge in selling pressure could send Musk’s favorite meme coin to $10, or even $0.06.

Disclosure: At the time of writing, the author of this article owns ETH and BTC.

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