For all its popularity, Dogecoin is a shadow of itself without the input of the Tesla CEO, Elon Musk. The meme-inspired cryptocurrency will be just what it is known as before, a meme.
Its recognition and acceptance are mainly due to the billionaire’s efforts; that is where the validation comes from and is sustained.
The meme token has had a relatively poor run in the last couple of days, with a bearish trend likely to follow. And from all indications, the only solution lies in the hands of one man; his name is Elon Musk.
Twitter and Musk to the Rescue
On April 5, Dogecoin experienced a single-day rise in price of 16%, the first in over four months. Meanwhile, the meme coin has not made any positive price performance in the market for some time now, and what better time for the price to rise than when its biggest supporter acquired a substantial stake in the social media firm, Twitter?
Following the report that Musk had purchased a 9.2% stake in Twitter and was subsequently made a member of the board of directors, the most plausible reason for the sudden rise in the value of the DOGE has to do with this latest development.
Notwithstanding the circumstances, Dogecoin regained its previous losses suffered so far, right from the beginning of the year until the news of Musk’s move into Twitter was announced. An incredible leap in price action.
DOGE Bounce Back
According to multiple reports making the rounds, within 24 hours of the announcement of Musk’s acquisition of stakes in Twitter, more than 120k DOGE wallets trading in the red zone since December last year suddenly recorded significant profits.
When the meme token was on a free fall dating back to January, about 30% of the total supply was held for a short time and immediately started recording long-term ownership.
The supply of DOGE has not experienced much movement at the moment. It appears to be approaching the previous six-month mark. Moreover, the brief rally on April 5, without doubt, reinvigorated investors’ confidence in Dogecoin.
However, the current price action may sound pleasing to would-be investors, but caution should be exercised because further price consolidation is possible in the future.
At the time of publication, the trading price for the leading meme cryptocurrency is $0.1493, which is a 6.96% decline over the past 24 hours.
Admittedly, Dogecoin remains prone to the ripple effect of the larger crypto market, as can be seen by the bearish direction the market is about to move into.
Another critical dimension to the performance assessment of the meme coin is that it shares a correlation with Bitcoin, which is expected to be 0.93. Therefore, any change in the price of BTC might influence the price direction of the DOGE.
The extent to which Musk can influence the price trajectory of Dogecoin in his new capacity will be known in the coming days.