- Dogecoin was one of the biggest gainers, soaring nearly 55% .
- Elon Musk’s $44 billion Twitter brought interesting changes to the price action of Dogecoin.
- The cryptocurrency currently shows oversold conditions on the 4-hour timeframe’s RSI.
Just like Ethereum , Solana , Polkadot , and Polygon , Dogecoin is also one of the best-performing cryptocurrencies in the market this week.
Most of the cryptocurrencies on the market had trended upwards by double-digit percentages as the market suddenly seemed to have come to life again.
DOGE was one of the biggest gainers, soaring nearly 60% on Saturday and hitting a target as high as $0.132. The coin made over 130% weekly gains jumping to new price highs.
This insane rise in the price of Dogecoin was in part influenced by the news about Elon Musk , the billionaire and business magnate, buying Twitter, the social media giant.
Over the last two years, Elon Musk, nicknamed the “dogefather,” has been one of the biggest proponents of the dog-themed cryptocurrency. Musk has more or less influenced the meme coin’s price since 2020 via tweets, mentions, and even direct endorsements.
Dogecoin In The Charts
Dogecoin began to rise from its $0.058 lows on Tuesday in a manner that can only be described as “parabolic.”
By midday, the memecoin had broken its local resistance around $0.100 mark and was showing no intentions of stopping.
Zooming out, we can see that Dogecoin has risen over the last day (Wednesday) as well, and has broken through another resistance around the $0.075 zone (red line). It is also worth noting that this $0.075 resistance was last tested in mid-August, as illustrated below.
Dogecoin has reversed for a retest of the $0.075 zone before a breakdown or a possible bounce to further highs. The cryptocurrency currently shows oversold conditions (80) on the 4-hour timeframe’s RSI.
An RSI value like this after such a big rise in price almost overnight is an especially strong indicator that opening further buy trades at this point may not be very feasible.
How Might Dogecoin’s Price React To Musk’s Twitter Buy?
Elon Musk’s $44 billion Twitter deal is expected to close on Friday and may bring some interesting changes to the price action of Dogecoin.
For one, a “Buy the rumor, sell the news” scenario is likely to occur at this point.
It is no longer news that reports concerning Musk positively influence the price of Dogecoin.
The Twitter served as the perfect opportunity for the big players in the market to collect liquidity from the traders who blindly initiate buy trades without first analyzing their positions properly.
Just like what happened on the Ethereum merge when the price of Ethereum went down instead of up after the historical event, it might be a sensible move to properly analyze the price movement of the cryptocurrency before opening any buy trades.
As far as predictions for Dogecoin’s further price action go, it is safe to assume that the memecoin may spend some time in consolidation, at best, before any further price movement to the upside.
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