Billionaire Elon Musk tweeted on May 13th that the crypto token DOGE has potential as a fiat currency, in reply to the Dogecoin creator.
IBM software engineer Billy Markus is the co-creator of Dogecoin alongside Adobe software engineer Jackson Palmer. Markus goes by the Twitter username Shibetoshi Nakamoto on his handle @BillyM2k – a reference to the pseudonymous creator of Bitcoin, known as Satoshi Nakamoto.
DogeCoin – Potential Currency
The reason for creating Dogecoin, other than as a ‘joke’ and ‘meme coin’, was as a peer-to-peer digital currency that could reach a broader demographic than Bitcoin – which itself was intended as a decentralized means of exchange to rival fiat money and the dollar as a reserve currency.
It has potential as a currency
— Elon Musk (@elonmusk) May 12, 2022
Elon Musk, also a proponent of Bitcoin and other meme tokens like Shiba Inu, sees that potential in Dogecoin. He previously told TMZ in an interview:
‘Fate loves irony. Dogecoin was invented as a joke, essentially to make fun of cryptocurrency. What would be the most ironic outcome? The currency that started as a joke in fact becomes the real currency. To the moon!’
In an interview with Time Magazine, Musk also stated that DOGE was better suited to financial transactions than BTC as the cost per transaction is lower, and the volume of transactions per second higher – the ‘total transaction flow has a much higher potential’. He added that Bitcoin is ‘suitable as a store of value’.
Usually an Elon Musk tweet about Dogecoin can result in a pump in the DOGE price, and this is breaking news today. The crypto markets have been in a correction since May 5th, however Dogecoin is currently green on the day, up 1 – 2% in the past 24 hours on crypto exchanges.
Will Dogecoin Go Up in 2022?
Has Dogecoin bottomed?
It will be interesting to see if another Dogecoin price rally results from this tweet interaction with one of the Dogecoin founders.
In April 2022 Dogecoin spiked 20% when it was announced Elon Musk had invested in Twitter, and owned 9.2% of the shares. A year after the famous Dogecoin bull run on the DOGE price chart above.
A follow up Dogecoin pump took place when it was announced Elon would take over Twitter entirely in a $44 billion acquisition. However both short term Dogecoin rallies completely retraced and the monthly candle closed red in April, and is currently in May.
Previous DOGE pumps in Dec 2021 and Jan 2022 when Musk tweeted that ‘Tesla will make some merch buyable with Doge and see how it goes’ and then confirmed that again, also retraced. Not even the Tesla CEO and SpaceX founder can move the markets long term – DOGE continued its bear cycle.
Where is the Bottom for Dogecoin?
Dogecoin has now corrected to an important support level from 2021 however – technical analysis (TA) can trump any tweets. The close of the January and February 2021 monthly candles was around $0.08 – that area acted as a resistance level. Previous resistance becomes new support.
When those broke in April 2021, Dogecoin began its historic bull run to $0.74, and that’s where Dogecoin is back at now – showing the importance of taking profits on the way up. Cryptocurrency assets like to retest areas they were at in the past, even months and years ago in the price history.
Dogecoin Price Prediction May 2022
If those levels can be flipped to support in May 2022, and the monthly candle not close below them, Dogecoin may have found a bottom – today the Dogecoin price opened at $0.085 and has put in a 25-30% bounce from the daily low so far.
Elon Musk may be tweeting this bullish sentiment at the macro bottom of Dogecoin. If Dogecoin is ever going to recover and go back up, it would be from the current support area.
That’s not to say Dogecoin will set a new all time high potentially – but it could move up to reclaim some higher levels. If you do buy Dogecoin at these price levels, take profit at several price targets like $0.1, $0.15, and $0.2.
With the current macroeconomic conditions and the S&P 500 under 4000, a realistic Dogecoin price prediction is hard to forecast. Crypto prices could see a final capitulation, if more FUD surrounding stablecoin Tether (USDT) materialises, or Terraform Labs can’t recover the situation with UST and LUNA. Wherever the crypto bottom is, we should be close to it with more potential for gains to the upside than further downside.
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