The acquisition of Twitter by Elon Musk is one of them.
At least three market catalysts show that Dogecoin (DOGE) could rise by at least 50% by the end of Q3 2022.
The first is the fact that Dogecoin has been drawing a “falling wedge” pattern on its longer timeframe charts since May 2021, hinting at the potential for a bullish reversal in the coming months. The second is the acquisition of Twitter by Elon Musk at the beginning of this week. The third is the increasing enthusiasm of DOGE investors because of Elon Musk’s acquisition of Twitter and its positive impact on the price of Dogecoin.
Breakout of a Falling Wedge Pattern is at Play
Falling wedges appear when the price is trending lower within a range defined by two descending and converging trend lines. Its appearance coincides with declining trading volumes, suggesting that speculative activity has slowed due to the narrowing of the price range.
A breakout of the wedge to the upside, coupled with rising trading volumes, suggests that the asset is rallying. As a rule of technical analysis, a falling wedge breakout can push the price up to the maximum distance between the upper and lower trend line of the setup.
The application of classical theory to Dogecoin suggests that it would rally towards $0.40 if the breakout occurs near the $0.14 level, i.e. about 190% above the current price.
In a worst-case scenario, the breakout of the falling wedge could send DOGE price up a little over 50% to $0.21, as its breakout point comes close to the apex around $0.75.
Elon Musk’s Purchase of Twitter
Earlier this week, Twitter announced that it had accepted Elon Musk’s offer to buy his social media platform for $44 billion. Dogecoin’s price reacted higher to the possibility of Musk integrating DOGE as one of the official payment methods for Twitter’s subscription services, based on his recent recommendations to the company’s board of directors.
Noelle Acheson, Head of market insights at Genesis Global Trading, noted that DOGE’s price rally bases on “a lot of speculation” as Musk has yet to confirm whether he will add a Dogecoin payment option on Twitter.
“But the possibility, however remote, is enough to get operators excited about the potential gain in DOGE adoption,” he told Bloomberg.
Excitement among Investors in DOGE
The announcement of Musk’s acquisition of Twitter on April 25 and its subsequent positive impact on the price of Dogecoin, which jumped nearly 20% on the same day, coincided with a pick-up in retail and institutional interest.
For example, internet searches for the keyword “buy Dogecoin” shot up 392% on April 25, according to Google Trends. Meanwhile, DOGE’s on-chain transaction volume worth more than $100,000 hit $2.59 billion on the same day.
“This is the highest volume since March 24, accounting for 94% of the total volume,” data analytics platform IntoTheBlock noted.
CryptoWallet.com, a cryptocurrency card service, also confirmed the same in an email statement to Cointelegraph, noting that, “online interest in buying Dogecoin spiked to almost four times the average volume in one day due to that Musk acquired full ownership of Twitter.”
The price of DOGE fell by more than 12% on April 26. However, the decline came along with lower volumes than the previous day, suggesting weaker profit-taking sentiment.
By Audy Castaneda
