Elon Musk’s $44 billion acquisition of Twitter increases Dogecoin by 25% in the last 24 hours, but selloff concerns persist.
Dogecoin (DOGE) values have flipped higher in the last 24 hours following Elon Musk’s acquisition of Twitter for $44 billion. At its peak on April 25, Dogecoin was trading at $0.17, still 77 percent behind its May 2021 record high.
Dogecoin is Twitter’s native currency.
DOGE’s price increased about 25% to $0.15 on a 24-hour adjusted basis, indicating that traders viewed Musk’s acquisition of Twitter as a bullish development for Dogecoin.
The reason: Musk’s long-standing support for DOGE, most recently advising the Twitter board to begin accepting the meme-crypto for Twitter Blue, the company’s first subscription service.
The statements come a year after Twitter announced intentions to increase its revenue to $7.5 billion by the end of 2023, generating hopes that Musk’s 100% ownership would enable the business to facilitate future sales via an additional DOGE payment option.
Elon acquires Twitter —> $DOGE becomes the currency of Twitter —> $1 $DOGE no longer a meme!
How does that sound ?
— Limbo (@CryptoLimbo_) April 25, 2022
Musk’s Tesla Motors began taking Dogecoin, and just DOGE, for some of its items in January.
Risks of a DOGE price correction
Nonetheless, Dogecoin is at risk of an interim selloff following its meteoric rise over the last 24 hours.
DOGE’s price began declining after re-testing a multi-month downward sloping trendline that served as resistance.
Interestingly, the line forms a descending channel pattern, suggesting that DOGE could extend its pullback by another 35% -40% by the end of Q2, as indicated in the chart below.
The risks of a selloff into the channel’s lower trendline remain significant as well, owing to the 200-day exponential moving average (200-day EMA) wave near $0.16, which has been limiting Dogecoin’s bullish attempts since November 2021.
On the other hand, a strong upward continuation above the channel’s upper trendline and 200-day exponential moving average would position DOGE’s price for a Q2 test of $0.20. This critical level also coincides with the 0.382 Fibonacci retracement line established from the $0.35 swing high to the $0.10 swing low on the Fibonacci retracement graph.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
