(Kitco News) - As the saga of Elon Musk purchasing Twitter nears its end – or at least the end of the beginning – the cryptocurrency Dogecoin (DOGE) has been a collateral benefactor as its price has experienced a 40% rally over the past two days.
Musk is a well-known supporter of the popular meme coin and his promotion of it played a part in its meteoric rise from $0.003 to $0.76 in 2021, but the subsequent onset of crypto winter wiped out 90% of those gains – with DOGE currently trading at $0.0771.
Following the SpaceX CEO’s successful bid to purchase Twitter for $44 billion earlier this year, Musk went on to tease the idea of adding Dogecoin as a payment method for a Twitter Blue subscription service, helping to spark a revival in the token.
But the relationship also worked in the opposite direction, as the price of DOGE plummeted to a low of 0.048 back in June, around the same time that Musk was attempting to back out of his Twitter deal, citing a misrepresentation of the number of bots that are active on the social media platform.
After a series of back-and-forths between the company and Musk, as well as the filing of a lawsuit that sought to compel the CEO to finish the purchase and rumors that he is being investigated by regulators for his actions surrounding the deal, Musk has decided to push the acquisition through.
With the purchase of Twitter expected to be finished this coming Friday, speculators have once again begun placing their bets ahead of the crowd that DOGE could see some nice upside.
Adding more fuel to the fire was a recent tweet from Jane Manchun Wong, a popular tech blogger, who claimed that Twitter is working on a wallet prototype that supports cryptocurrency deposits and withdrawals.
Twitter is working on a “wallet prototype” that supports “crypto deposit and withdrawal”
— Jane Manchun Wong (@wongmjane) October 24, 2022
Twitter has yet to confirm or deny these rumors, but that hasn’t stopped speculators from jumping into the market and focusing their attention on one of Musk’s favorite cryptocurrencies – Dogecoin.
On Wednesday, Musk changed his Twitter bio to “Chief of Twit” and paid a personal visit to tour the Twitter headquarters, helping to confirm that the deal was indeed expected to finally come to a close.
This helped provide an added boost in momentum for DOGE, which hit a high of $0.081 in early trading on Thursday and has since entered into consolidation near support at $0.078.
DOGE/USD 4-hour chart. Source: TradingView
From a technical standpoint, the recovery is now showing signs of exhaustion and risks a further correction lower as traders take profits from the 40% increase. Unless there are additional developments that help DOGE maintain its recent momentum, its price risks falling back to support at $0.06 in the weeks and months ahead.
On the flip side, if it can extend its breakout above resistance at $0.081, DOGE could run up to its next major resistance level found near $0.11, equating to a 50% increase from its current price level.
