Dogecoin has been rallying over today’s trading session, following the general sentiment in the market and receiving support from its biggest advocate Elon Musk. SpaceX and Tesla CEO Elon Musk confirmed an agreement to acquire social media site Twitter (TWTR).
Elon Musk was about to enter into a legal battle with social media; the entrepreneur announced a deal to purchase the company early in 2022 but refused to see it through due to some alleged false data on Twitter’s number of users.
According to multiple reports, Elon Musk confirmed the original offer of $44 billion and $55 per shares to buy the company. As seen in the chart below, the Elon Musk-Twitter controversy has been a major driver in TWTR’s price action.
The stock’s trading has been halted during today’s trading session, after a roller-coaster year that took TWTR from a high of around $55 to a low of $35.
Elon Musk Will Buy Twitter. This could be a good deal for Dogecoin
Dogecoin’s news of the Musk-Twitter agreement came just in time, as the cryptocurrency was already gaining ground with Bitcoin and larger cryptocurrencies. But, it seems that the former has lost steam and might be ready to re-test previous support levels.
In the meantime, Dogecoin records an 8% profit over today’s trading session leading to a spike in volatility and an increase in its bullish momentum, as seen in the chart below. Dogecoin is finally breaking out of its tight range, and now it has reclaimed an important area at $0.064.
For a while, Musk-related news has driven Dogecoin’s price action. Tesla’s CEO has been an advocate for the memcoin. Today’s event triggered two massively bullish factors for the cryptocurrency, according to research firm Santiment.
The Musk-Twitter deal saw an increase in transactions involving large players and major funds. Santiment did not see an increase in funding rates, despite the fact that the price had traded higher than in prior rallies.
This means that traders weren’t taking high leveraged positions. In that sense, the research firm wrote the following on the cryptocurrency’s potential short term.
🐶 #DogecoinIt has risen by a solid +9% in just the past 24 hours. #memecoinIt remains ranked 10th in market capital assets #crypto. Two of the best predictors for price direction changes are whale transactions and financing rates. https://t.co/k3voMpSH3k pic.twitter.com/uGi7Zg8Sig
— Santiment (@santimentfeed) October 4, 2022
Musk Driven Dogecoin Rally will be short-lived
Beyond large players taking a side in Dogecoin’s price action, there is potential for this Musk-Twitter deal to become permanently bullish for the memecoin. It has been open to crypto adoption and adding blockchain-based functions.
Users can use the platform to upload non-fungible tokens (NFTs), and also to send tips to their friends using a Bitcoin transaction. As the deal is finalized, Musk may include Dogecoin among the few cryptocurrency supported by Twitter. This will increase its adoption.