Dogecoin surges 25% after Musk announces DOGE payments for Tesla goods

Dogecoin (DOGE) prices rose significantly on Friday when Elon Musk announced that Tesla would start accepting them as payment for goods.

Following the announcement, DOGE’s price surged nearly 13% to hit a 30-day high of $0.2150. Its surge comes as part of a larger intraday rally that occurred before Musk’s tweet about Dogecoin went viral.

DOGE price was up more than 25% on Friday before correcting lower to $0.1986 on profit taking.

DOGE/USD 1 hour price chart. Source: TradingView

better than bitcoin

Dogecoin surges 25% after Musk announces DOGE payments for Tesla goods
Dogecoin surges 25% after Musk announces DOGE payments for Tesla goods

Tesla’s integration of a DOGE payment option into its online shopping portal comes almost a month after Musk announced his willingness to accept the cryptocurrency as a trial payment method.

Central to Musk’s love for DOGE was its “better than Bitcoin” capabilities, primarily as a payment option due to its lower power consumption. In excerpts from Musk’s testimony to Time Magazine, he explained:

“Basically, Bitcoin is not a good substitute for transaction currency. Although it started as a silly joke, Dogecoin is better suited for transactions.”

The billionaire businessman further emphasized that Bitcoin’s cost per transaction is high, while transaction volume is small compared to DOGE. As a result, Bitcoin might be fine as a store of value. On the other hand, DOGE could continue to encourage people to spend money.

What’s next for DOGE?

The recent round of buying in the Dogecoin market eased somewhat as DOGE tested a multi-month resistance trend line for a break above the top.

In more detail, DOGE’s price rally hit a descending trendline resistance that had limited its upside since May 2021. On Friday, the trend line was again crucial to send DOGE from its highest intraday maximum of $0.2150 to $0.1958 as illustrated in the chart below.

DOGE/USD daily chart. Source: TradingView

Meanwhile, Dogecoin’s 200-day exponential moving average (200-day EMA; the orange wave) also played a key role in capping its gains on Jan. 14. Taken together, the confluence of resistances indicated that DOGE price might retreat from its ongoing uptrend in the coming sessions.

If that happens, the token would likely test its 50-day EMA (the velvet wave) as support, with a chance to extend its correction towards $0.1367 based on its recent history as support.

DOGE/USD daily chart. Source: TradingView

Conversely, a decisive break above the downtrend line resistance and the 200-day EMA could see traders eyeing $0.30 as the next upside target in the Dogecoin market. The $0.30 area had previously served as resistance.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.

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