Dogecoin leaps 25% after Musk announces DOGE payments for Tesla merch

Prices for Dogecoin (DOGE), rose significantly on January 14, when Elon Musk announced that Tesla would accept it as payment.

Dogecoin makes Tesla merch available for purchase
Elon Musk (@elonmusk), January 14, 2022

The DOGE price rose nearly 13% after the announcement and reached a high of $0.2150 for the 30-day period. The upside movement was part of an intraday rally that began before Musk’s Dogecoin tweet went viral.

On Jan. 14, the DOGE price jumped by more than 25% before falling to $0.1986 due to profit-taking.

Hourly chart of the DOGE/USD exchange rate Source: TradingView

Better than Bitcoin

Tesla’s integration with a DOGE payment option in its online shopping portal was almost a month after Musk had expressed his willingness to accept cryptocurrency payments on a trial basis.

At the center stage of Musk’s love for DOGE was its “better-than-Bitcoin” features, primarily as a payment option due to its lower electricity consumption. He explained this in excerpts of Musk’s statements to Time Magazine.

Bitcoin is not a substitute for transactional currencies. Dogecoin, even though it was a joke, is more suited to transactions.

He also stated that Bitcoin’s transaction cost is higher than DOGE, but its transaction volume is lower than DOGE. Bitcoin could therefore be a valuable store-of-value asset. DOGE, on the other hand could encourage people to spend.

What’s next for DOGE

DOGE tested a multimonth resistance trendline for topside breakout. This caused the latest round of Dogecoin buying to slow down.

The DOGE price rally was stopped by a descending trendline resistance, which had been limiting its upside attempts since May 2021. The trendline was again instrumental in sending DOGE from the intraday high of $0.2150 up to $0.1958 on Jan. 14.

Daily price chart for DOGE/USD Source: TradingView

The Dogecoin’s 200 day exponential moving average (200 day EMA; the orange waves) played a crucial role in limiting its gains from Jan. 14. The resistance confluence and the price movement suggested that DOGE may reverse its current uptrend in the coming days.

Related: Dogecoin creator slams Mozilla for pausing crypto donations

If this happens, the token will be poised to test its 50 day EMA (the velvetwave) as support. There is also the possibility of the token’s correction to $0.1367 based on its support history.

Daily price chart for DOGE/USD Source: TradingView

A decisive breakout above the descending resistance line and the 200-day EMA might make traders look at $0.30 as the next upside target in Dogecoin. Resistance was previously found around the $0.30-level.

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Lillian Call

I am a technology and gaming writer by profession. I love NFT's and play to earn gaming such as Axie Infinity. I love writing about anything on the blockchain, especially gaming and entertainment. I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.