Dogecoin Surges 6% Due To New Tweet From Elon Musk

Elon Musk continues to be one of the biggest factors influencing the Dogecoin price, as the Twitter CEO proved once again today. Musk made an apparent joke by writing, “High time I confessed I let the Doge out.” He also shared an image with an inscription.

In scrawled script, the image reads, “It was me, I let the dogs out.” Within no time, the Dogecoin price responded to Musk’s tweet with a 6.6% increase. Shiba Inu saw a modest price appreciation of 2.5%, likely because Musk was talking about dogs in the plural.

High time I confessed I let the Doge out pic.twitter.com/TAi4p1khAd

— Elon Musk (@elonmusk) February 22, 2023

What Musk’s tweet actually means or whether it has a deeper meaning can only be speculated, as always. Rumors were immediately revived from the Dogecoin community that Musk is implying that DOGE will be integrated on Twitter.

However, the theory seems rather unlikely. In a follow-up tweet, Musk wrote, “Fact check me @CommunityNotes.”

Remarkably, just hours before Musk’s tweet, the Community Notes Twitter account posted a message stating that starting today, users will receive a heads-up when a community note is displayed about a tweet they have replied to, liked or retweeted.

“This helps give people extra context that they might otherwise miss,” the announcement continues. Therefore, it seems likely that Musk’s latest Dogecoin tweet was simply to draw attention to Twitter’s new feature, while once again showing his fondness for DOGE.

For the price behavior of DOGE, the recent example of an Elon Musk tweet is emblematic. In the past, virtually every tweet from Elon Musk caused a sudden pump in the price of Dogecoin.

There is even research on the “Elon Musk” effect on Dogecoin. The result of an older Blockchain Research Lab study was that there was a price jump of about three percent on average for all 47 events after Musk tweeted about DOGE.

The study found that Dogecoin usually sees an immediate and very large price spike, followed by another 45-minute price spike. Afterwards, the returns fell back to the level of the first price spike. This is exactly what we are seeing this time as well.

Dogecoin Price Remains Within Trading Range

However, a look at the 1-hour chart reveals that the sudden surge in the DOGE price was not really substantial. The Dogecoin price is currently in a range between $0.08 and $0.09.

The rally triggered by Elon Musk already ended in the middle of the range, well before the key resistance at $0.09 could even be tested. At the time of writing, DOGE traded at $0.0871 and already saw a first retracement of the impulsive move.

Featured image from Marca, Chart from TradingView.com