It’s been a good week for the Doge community. The meme coin registered a 27 percent spike over the last seven days, jumping from $0.05897 on October 20 to $0.07799 at the time of writing. Broader market growth and renewed hope around the Elon-Twitter deal seem to be the reasons behind the rally.
Dogecoin started its ascent on October 25 following a decline in the US Dollar Index and positive Q3 earnings reports from crypto-centric companies such as Coinbase and MicroStrategy. As a result, the crypto market found itself in a buoyant mood, with most tokens in the green over the last week and the global crypto market cap also jumping above the $1 trillion mark for the first time in weeks. Dogecoin’s growth spurt was further accelerated when Elon Musk announced that his deal with Twitter is nearing a close and that everything could be finalised as soon as October 28.
Often referred to as the “DOGEfather,” Musk is known to influence the price of cryptocurrencies through his tweets and announcements. He has also been a long-standing proponent of the DOGE and even suggested adding it as a payment method on Twitter.
Early this morning, Musk posted a cryptic tweet, including a video of him holding a sink while entering the Twitter HQ. “Entering Twitter HQ – let that sink in,” he said in his tweet, while also changing his description on Twitter to Chief Twit. Even though the tweet does not mention Doge, the excitement around the deal was enough to send the coin skyrocketing.
However, it’s difficult to tell whether the rally will sustain. On the one hand, the increased buying pressure has resulted in the asset being overbought. This could cause the price of Dogecoin to cool down in the coming days and weeks.
On the other hand, the price spurt has helped Doge rise through two major resistances: its 50-day Simple Moving Average (SMA) and 100-day SMA.
These two technical indicators have previously formed solid support levels for Doge and have helped sustain its price in the past. Additionally, the price increase could push Doge whales into action. These large investors have been relatively dormant through the crypto winter, but they could swing into action considering the current price rally and this could cause DOGE to spike further.
At the time of writing, Dogecoin was changing hands at $0.0779, up 16.87 percent since yesterday, and second only to the South Korean metaverse token, KLAY, in terms of 24-hour gains.
