Electric car billionaire, Elon Musk, has tweeted that his famous electric car manufacturer, Tesla, will start supporting DOGE payments for some Tesla ‘marches.’
Tesla will make some merch buyable with Doge & see how it goes
— Elon Musk (@elonmusk) December 14, 2021
Musk’s latest tweet follows the announcement by TIME magazine that he is their person of the year for 2021. It is no coincidence that DOGE price has surged by almost 25% following Musk’s tweet and the announcement from TIME magazine.
The Musk-Dogecoin Relationship
Musk is not just a fan of Dogecoin. He is also a core investor in the project. Around May 2021, the Tesla boss predicted that Dogecoin is more valuable than Bitcoin. He announced that Tesla would no longer be supporting bitcoin payments for Tesla car purchases around the same time.
A few months after that prediction, Musk made some suggestions for Dogecoin developers to help increase the efficiency of the network and reduce transaction charges by almost 95%. A few weeks after Musk made the suggestion; Dogecoin announced an upgrade to effect his suggested changes on the network. Also, Musk has been in constant communication with Dogecoin developers on ways to enhance the use cases and mining of the network’s governance token.
Musk claimed that Dogecoin could overtake bitcoin once it’s cheaper to mine and its mining has no detrimental environmental impact. In the build-up to his appearance on S.N.L. (Saturday Night Live), Musk declared himself the ‘Doge father’ and changed his Twitter bio to reflect that name. DOGE price has almost always shot up when Musk tweets about the digital currency.
The latest one was two months ago when Musk tweeted that he might soon become a ‘Dogecoin’ trillionaire. A blockchain research data revealed that DOGE price has surged by nearly 20% each time Musk makes a positive remark regarding the meme-themed cryptocurrency. These facts prompted one blockchain research analyst, Lennart Ante, to query whether it is appropriate for famous figures to show their favoritism towards any digital asset.
DOGE Price Action
DOGE price started rising at about 10 AM UTC, with the coin gaining 8% in value within four minutes. Then, the appearance of a big candle some few minutes later pushed its price by nearly 17% leading to a total growth of about 25%.
The bullishness lasted a few hours before a retrace occurred. There was intense selling pressure which caused the DOGE price to dip to about $0.20; its daily growth also declined by almost 17%. The intense selling pressure might have resulted from traders exiting their positions from the previous bullish market, which is not uncommon among Dogecoin swing traders.
Dogecoin price is known for being on a decline for a long time, then undergoing a sharp spike suddenly. Hence, traders usually buy during this bull market, hold through the bear market, then sell in the next bull market, which explains the intense selling pressure seen today.
Several indices on wallet activities and trading volumes indicate that older wallets made the highest number of ‘sell’ moves during the massive selloff. As of this writing, DOGE is bouncing around a range, indicating that it can continue its bullishness. However, it won’t do so unless there is another intense buying pressure to match or closely match the massive selloff that occurred previously or several whales invest in the meme-coin.