Dogecoin (DOGE) soared more than 8% today (5), in addition to following the overall market trend, it also received the support of the number one “fanboy” Musk. The Tesla and SpaceX CEO has confirmed that he is willing to carry out a deal to buy social media Twitter.
Originally, Musk was about to enter a lawsuit battle with Twitter. He announced the acquisition of Twitter in April, but later backtracked and refused to complete the deal, citing the number of Twitter users involved in some fake accounts.
The latest report pointed out that Musk sent a letter to Twitter confirming the acquisition of Twitter for the originally proposed $44 billion price. As shown in the chart below, Musk’s controversial words and deeds have been the main reason for the wild swings in Twitter’s stock price. During this period, Twitter’s stock price was like a roller coaster, falling from $55 to $35 per share, and rose 22% to $52 on the 4th, and trading was halted at one point during the session.
So why is Musk buying Twitter, which is bullish news for Dogecoin? While Dogecoin has risen along with Bitcoin and other large cryptocurrencies, it has lost momentum recently and may be poised to backtest previous support levels.
Today, Dogecoin is up 8% today, with soaring volatility and bullish momentum. The chart below shows that Dogecoin finally broke out of a tight trading range and re-entered the important $0.064 range.
News related to Musk often drives the price of Dogecoin up or down. Musk has always been a staunch supporter of Dogecoin. According to researcher Santiment, the latest developments have triggered two major bullish factors for Dogecoin.
Dogecoin’s big investors and large funds have seen a surge in deals as Musk confirmed the tweet. Unlike previous surges, Santiment did not observe a spike in funding rates during the Dogecoin price surge.
In other words, traders are not using high leverage to trade Dogecoin. From this point of view, Santiment believes that Dogecoin has the potential to rise in the short term.
In addition to the big players driving the price of Dogecoin, another major factor is that Musk’s acquisition of Twitter may bring a long-term bullish factor for Dogecoin. Twitter has embraced cryptocurrencies, but also added blockchain capabilities.
Twitter has allowed users to set NFTs as their profile photos, and has allowed users to accept “tips” from fans in bitcoin or ether. If Musk’s acquisition of Twitter is completed in the next few months, Musk may include Dogecoin among the few cryptocurrencies supported by Twitter, thereby increasing the adoption of Dogecoin.