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

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

Twitter’s native foreign money: Dogecoin?

DOGE’s worth rose by almost 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 help 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 a further DOGE fee 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 may imply for Twitter’s crypto plans

DOGE worth correction dangers

Nonetheless, Dogecoin faces interim selloff dangers following its spectacular positive factors previously 24 hours.

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

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

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

The selloff dangers towards the channel’s decrease trendline additionally stay elevated because of the 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 day by day worth chart that includes Fib S/R ranges. Supply: TradingView

Conversely, a powerful upside continuation above the channel’s higher trendline and the 200-day EMA would place DOGE’s worth for a check of $0.20 in Q2. This key stage 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 below are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your individual analysis when making a call.