Bulls are back in town: Dogecoin pumps as Musk takes over Twitter
The long-running bear market of 2022 may well be coming to a close and DOGE is leading the charge.
Many major cryptos have posted double-digit gains this week. Ethereum has been a prominent performer breaking above its US$1,500 resistance level, which now appears to be sturdy support.
However, the crypto leading the charge is the popular memecoin, Dogecoin (DOGE).
In a throwback to 2021, DOGE, at one stage, posted triple-digit weekly gains, climbing from US$0.06 to just over US$0.15.
The trading range breakout offered significant returns for traders who managed to capitalise on the position.
Although it has since retraced about 20%, it appears to have found support on the hourly 50-period exponential moving average (EMA).
At the time of writing, DOGE is trading at US$0.11468, with a market cap of about US$15 billion.
So why the pump?
Although it was a clean set-up as far as a technical trade, the catalyst for Dogecoin's breakout can primarily be attributed to crypto and social media news.
On 27 October 2022, the world's richest man and Tesla founder, Elon Musk, concluded his US$44 billion acquisition of the social media platform Twitter.
Musk is a long-time DOGE supporter and was largely responsible for the memecoin's rise to mainstream popularity throughout the bull run of 2021.
He has also been a polarising figure regarding digital currencies as a whole. Earlier this year, Musk reportedly sold 75% of Tesla's Bitcoin holdings as the company reported a quarterly loss.
However, with over 100 million Twitter followers, his posts are closely watched by many and have extraordinary market-moving potential.
It’s inevitable pic.twitter.com/eBKnQm6QyF
— Elon Musk (@elonmusk) July 18, 2020
Dogecoin's community of loyal fans have responded positively to Musk's acquisition of Twitter and his confirmed CEO position. Or, as he has chosen to refer to himself in an updated Twitter bio – Chief Twit.
Although there is currently little utility for the memecoin, beyond being a speculative investment, Musk suggested earlier this year that he intends to solve this by implementing DOGE as a payment method for Twitter's premium subscription service.
What's next for Dogecoin?
DOGE has outperformed much of the market and shown extremely positive signs that its bear market bottom may be in.
It has gained billions in market cap since the announcement that Elon Musk is officially the largest shareholder and CEO of Twitter.
However, to put things in perspective, DOGE is currently trading down about 85% from its all-time high of US$0.73, reached during the last bull cycle in May 2021.
That said, things move fast in crypto, especially when the world's richest man is involved.
If Musk continues to advocate Dogecoin, potentially even bringing a reliable utility in the form of payment for Twitter subscriptions, prices will likely continue on an upward trajectory.
US$1.00 has been a long-time target for many DOGE investors – a psychological level that once seemed impossible may well be claimed in the not-too-distant future.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.