Musk Provokes Intraday Dogecoin Pump – Analysis, 8 Feb
Elon Musk, the founder of Tesla and SpaceX, who provoked an intraday pump of Dogecoin (DOGE) last week, keeps joking with the crypto community on Twitter. On Thursday, he posted an image from 'The Lion King' that showed himself holding up a dog symbolizing Dogecoin:
Later, he followed up with another tweet where he stated that Dogecoin is the people's crypto:
The price of Dogecoin increased by almost 50% just within an hour after the tweets were posted. That is not the first time that Musk's tweets have triggered price pumps of Dogecoin.
During the weekend, the billionaire created a poll, asking if Dogecoin will become the future currency of the Earth:
It is still unclear if the founder of Tesla is simply joking with the crypto community or is shilling a cryptocurrency he has already bought.
Nevertheless, his series of tweets has lifted the price of Dogecoin, turning it into the tenth biggest cryptocurrency by market cap, according to CoinGecko.
Interestingly, it seems that other influential people on Twitter are also starting to apply Musk's approach to shill their cryptocurrencies. For example, well-known crypto investor Michael Novogratz called his new haircut '$link marine haircut', trying to promote the cryptocurrency LINK (Chainlink), which he has probably bought recently:
Last week, Forbes presented a list of the cryptocurrency billionaires. Brian Armstrong, CEO of Coinbase, topped the ranking. His fortune is estimated at $6.5 billion. Among the top 10 in the ranking are also Michael Saylor, the CEO of software firm MicroStrategy with a net worth of $2 billion; Changpeng Zhao ("CZ"), the founder of crypto exchange Binance with a net worth of $1.9 billion; Tyler and Cameron Winklevoss with a net worth of $1.6 billion each.
It is worth mentioning that these crypto billionaires have been recently quite active on Twitter, promoting certain cryptocurrencies as well.
The Monday market starts with price consolidation. At the time of writing, according to Coin360.com, one Bitcoin costs €32,840.04 (+0.92%), one Ethereum – €1,373.69 (+0.88%), and one LINK – €20.86 (+1.47%):
Source: Coin360.com (Daily crypto market performance)
Now let us analyze the price charts of the major cryptocurrencies against the euro in the key time frames.
In the 4-hour chart, last week, BTC/EUR managed to exit the Descending Triangle, thereby trying to resume the uptrend.
As can be seen from the chart, BTC/EUR hit the level of the previous local high and, after that, it faced resistance and declined slightly.
We consider three potential scenarios for the near future of the price of Bitcoin. In a bullish scenario, BTC/EUR consolidates at the 30-day Moving Average, then it resumes the uptrend. In this case, the price probably surpasses the previous local high (approximately €34,200).
In a neutral scenario, BTC/EUR continues to consolidate at the 30-day Moving Average, forming a sideways movement.
In a bearish scenario, BTC/EUR drops to the lower line of the Descending Triangle or to the level of approximately €25,000 per one digital coin.
After that, the price of the cryptocurrency bounces off and forms a broad range.
In our estimation, the most likely scenarios are the bullish and the neutral ones.
This past week, ETH/EUR confirmed the bullish sentiment. It formed a solid bullish candlestick with a local low above the previous ones and a local high above the previous ones:
Because the bullish sentiment remains in place, traders will continue to open long positions.
In the 4-hour chart, ETH/EUR has started to draw an Ascending channel (uptrend):
We think if ETH/EUR pulls back to the lower line of the channel, a subsequent rebound may create a favorable opportunity to enter the market.
Also, as can be seen from the chart, the 30-day Moving Average is going upwards, just underneath the lower line of the channel. Therefore, there are enough bullish signals and formations to support the price of Ethereum.
In the weekly chart, LINK/EUR formed a Bullish Engulfing:
This bullish candlestick formation increases the probability of further price increase or, in the worst case, further price consolidation.
That is why we think LINK/EUR may continue to move forward within the trajectory of the Ascending channel:
If the price of Chainlink pulls back to the lower line of the channel, in the case of a subsequent rebound, many traders will start to open long positions.
Stay updated on everything Bitcoin-related with Bitvalex. Bitvalex is a licensed digital wallet and cryptocurrency exchange; learn more about us and blockchain technology and sign up to use our services.
The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.