Dogecoin was flying high after the reports surfaced that Elon Musk owns a 9.2 per cent stake in the micro blogging website Twitter. This makes Musk the largest shareholder in the company.
The stake in Twitter of Elon Musk, who is fondly called as the ‘Doge Father’ by fans, propelled a strong rise in the Dogecoin prices, with speculators flocking to the memetoken.
Dogecoin hit $0.1553 levels on Tuesday, rising more than 5 per cent in the last 24 hours. Its marketcap topped the $20 billion mark, after a long period, the data from Coinmarketcap suggested.
However, the popular crypto token is trading about 77 per cent below its all-time peak of $0.6848 hit in June 2021. On a year to date basis, the crypto token has tumbled about 20 per cent.
However, market experts believe that Dogecoin is likely to continue to have positive momentum and the gains will sustain, on both technical and fundamental basis.
Vikram Subburaj, CEO of Giottus Crypto Exchange, said that Elon Musk’s Twitter investment has led Dogecoin to break out from a bearish structure with price action forming higher lows and higher highs.
“Doge has retested the trendline resistance and has held as support. Overcoming resistance at $0.175 and $0.195 will further indicate signs of strength. Doge faced rejection at these levels during its downtrend,” he added, decoding the charts.
There is no dearth of those who are expecting Dogecoin to do a ‘Twitter’ again and expecting the crypto asset to deliver solid returns in the near future. A number of players see Dogecoin as synonymous with Musk.
Echoing the similar tone, Anndy Lian, Chairman, BigONE Exchange said, “Twitter stock has rallied about 25 per cent after Elon Musk’s stake in the social media company. Speculators are expecting Dogecoin to have a similar impact if not more.”
Despite being a vocal critic of Twitter, Musk has been flirting with the possibility of having his own platform. Many now are expecting Musk to, perhaps, buyout Twitter.
A few market experts believe that Musk’s push is the major driving factor behind the rally in Dogecoin, whereas others said that is not all about Musk only. The memecoin has an army of faithful believers, who are the driving force.
“Dogecoin is tied to Musk’s actions on the positive side while it remains volatile and influenced by wider market structure in a downtrend,” Subburaj added.
The trading volumes of Dogecoin have been astronomical as the Doge token worth more than $2.57 billion exchanged hands in the last 24 hours, registering a rise of 125 per cent. There are more than 132.67 billion Dogecoins in circulation.
Shivam Thakral, CEO of BuyUcoin said that Dogecoin is the most popular Memecoin, and finds robust support from the mercurial figures like Elon Musk.
“The recent tweet by Elon in support of the German travel site ‘GetYourGuide’ announcing that Dogecoin will be accepted as a mode of payment sparked investor interest in Doge,” he added.
Market experts advise investors to be cautious while investing the memecoin. Dogecoin remains a volatile investment with no fundamental utility, they say.
“We advise investors to stick to a certain set of crypto assets according to their risk appetite given no possibility of offsetting losses from one crypto to another in the new tax regime,” said Subburaj from Giottus
Lian from BigONE suggested investors look for the long term. “For those who are dealing with derivatives, monitor the price carefully and start off with lower leverages,” he cautioned the traders.