Dogecoin price risks 40% correction despite Elon Musk-Twitter euphoria

Dogecoin (DOGE) costs flipped greater within the final 24 hours after its most celebrated backer, Elon Musk, bought Twitter for $44 billion. At its finest, Dogecoin had climbed to $0.17 on April 25, albeit nonetheless down 77% from its report excessive in Might 2021.

Twitter’s native forex: Dogecoin?

DOGE’s value rose by practically 25% to $0.15 on a 24-hour adjusted timeframe, confirming that merchants thought of Musk’s acquisition of Twitter a bullish occasion for Dogecoin.

The rationale: Musk’s long-time assist for DOGE, together with his current recommendation to the Twitter board that they need to begin accepting the memecoin for Twitter Blue, their first-ever subscription service.

The feedback appeared a 12 months after Twitter revealed that it plans to double its revenues to $7.5 billion by the tip of 2023, elevating hopes that Musk’s 100% possession of the corporate would have it facilitate its future gross sales by way of an extra DOGE cost choice.

In January, Musk’s flagship firm Tesla Motors began accepting Dogecoin, and solely DOGE, for a few of its merchandise.

Associated: What Elon Musk’s funding might imply for Twitter’s crypto plans

DOGE value correction dangers

Nonetheless, Dogecoin faces interim selloff dangers following its spectacular positive aspects up to now 24 hours.

DOGE’s value began correcting decrease after re-testing a multi-month downward sloping trendline as resistance.

Apparently, the road constitutes a descending channel sample, which raised the potential for DOGE extending its pullback transfer by one other 35%-40% by the tip of Q2, as illustrated within the chart under.

DOGE/USD every day value chart that includes ‘descending channel’ setup. Supply: TradingView

The selloff dangers towards the channel’s decrease trendline additionally stay elevated as a result of 200-day exponential shifting common (EMA) wave close to $0.16, which has been capping Dogecoin’s upside makes an attempt since November 2021. 

DOGE/USD every day value chart that includes Fib S/R ranges. Supply: TradingView

Conversely, a robust upside continuation above the channel’s higher trendline and the 200-day EMA would place DOGE’s value for a take a look at of $0.20 in Q2. This key degree additionally coincides with the 0.382 Fib line of the Fibonacci retracement graph, drawn from the $0.35-swing excessive to the $0.10-swing low.

The views and opinions expressed listed here are solely these of the writer and don’t essentially mirror the views of Each funding and buying and selling transfer includes threat, it is best to conduct your individual analysis when making a choice.

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