Cryptocurrency

Why is Dogecoin price up today?

Dogecoin (DOGE) pared a portion of its massive daily gains on April 4 as investors speculated on the meaning behind Elon Musk’s latest cryptic stunt.

Elon Musk pumps Dogecoin by over 30%

In what appears to be a late April Fool’s joke, Musk-owned Twitter changed its official blue bird logo to mimic Dogecoin’s symbol — a Shiba Inu dog featured in viral memes. Later, Musk tweeted a meme recognizing the change.

Over the years, Musk has influenced the Dogecoin market with his cryptic tweets. The billionaire investor calls himself “Dogefather,” and has earlier discussed the prospect of adding a DOGE payment option for Twitter subscription services. 

His other ventures, Tesla and SpaceX, already accept DOGE for their merchandise products.

Dogecoin rose nearly 33% after Musk’s tweet on April 3, reaching $0.104, its highest level since December 2022. DOGE price has pared a portion of its gains since, dropping to lows of $0.092.

DOGE/USD daily price chart. Source: TradingView

Interestingly, DOGE’s ongoing run-up came after the news of Musk’s lawyers seeking to end a $258 billion lawsuit against him for allegedly pumping Dogecoin prices.

In July 2022, the plaintiff accused Musk of manipulating DOGE prices using his broad social media presence, including an appearance on Saturday Night Livewhich helped the Dogecoin price rally “by more than 36,000% in two years,” crashing afterward.

What’s next for DOGE price?

From a technical perspective, Dogecoin eyes a short-term pullback after testing a strong selling area (purple) as resistance, shown below. Also, DOGE’s daily relative strength index (RSI) has entered its overbought zone, which boosts its correction prospects in the coming days.

DOGE/USD daily price chart. Source: TradingView

As a result, a DOGE pullback scenario could have it drop toward $0.089 as its next downside target in April, down 10% from the current prices. This target level has served as resistance during the January and February uptrend earlier this year.

Related: Bitcoin price bounces after CZ arrest rumors as traders eye $30K next

Moreover, a decisive close below $0.089 could have the market eye $0.08 as the next downside target by April or May. This level, down about 20% from current prices, acted as support during the February–March correction phase and coincided with DOGE’s multimonth ascending trendline support.

Conversely, independent analyst Crypto Kaleo sees Dogecoin rallying nearly 125% in the long term as it nears a breakout above a long-standing descending trendline resistance.

DOGE/USD weekly price chart. Source: TradingView/Crypto Kaleo

“When DOGE breaks out above the HTF downtrend here, I think $0.25 is a reasonable target,” he said.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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