The Dogecoin price popped on Tuesday as investors reflected on the latest statement by Elon Musk. DOGE surged to a multi-week high of $0.2195, which was about 45% above the lowest level during the weekend. Its total market capitalization has risen to more than $23 billion, which is significantly lower than its all-time high of more than $40 billion.
Dogecoin price jumped after a tweet by Elon Musk in which he said that his company, Tesla, will start accepting the currency for its merchandise sales. Tesla sells several merchandises like jackets, joggers, and pet liners among other car accessories. Still, these sales account for a relatively small but growing portion of its total revenue.
DOGE’s gains were relatively short-lived as the coin has now dropped to about $0.1776, which is about 20% below its highest level on Tuesday.
Broadly, focus now shifts to the upcoming Federal Reserve interest rate decision. The bank is expected to leave interest rates unchanged and reduce the size of its asset purchases.
The four-hour chart shows that the DOGE price was in a consolidation phase in the past few days. It then made a major bullish breakout on Tuesday after Elon Musk’s tweet. The price has moved slightly below the descending trendline that is shown in black. It is also attempting to move below the 25-day and 50-day moving averages.
Therefore, I suspect that the coin will drop slightly and then rebound as investors buy the dip. This could see it retest the key resistance level at $0.20 ahead or after the Fed decision. On the flip side, a move below $0.17 will invalidate this view.
This post was last modified on Dec 15, 2021, 05:24 GMT 05:24