Elon Musk’s Twitter investment puts a 150% rally into play for Dogecoin

Dogecoin (DOGE), continues its rebound four weeks after a bottom near $0.10, and is now promising more upside movements in Q2/2022.

Dogecoin prices near two-month highs

The price of DOGE had increased by 6.5% to $0.15 per token week-to-date. Recent gains in the coin’s price were evident after Elon Musk revealed his $3-billion stake at Twitter on April 4, reinforcing his influence over its market.

Musk is a strong supporter of Dogecoin, including his decision that DOGE payments be accepted at Tesla’s online merchandise shop.

Cointelegraph reported that Musk’s investment could push Twitter’s crypto initiatives forward, and even allow DOGE integration to the social media platform.

@jack controls 2% of Twitter, and @elonmusk has 9%. @jack loves BTC. @elonmusk is a $DOGE fan.
Ran NeuNer (@cryptomanran), April 4, 2022

DOGE’s Falling Wedge Breakout

Musk’s investment in Twitter also helped Dogecoin break out of a falling wedge.

Falling wedges can be described as bullish reversal setups. They appear when the price consolidates below a range that is defined by two converging, ascending trendlines, while leaving behind a trail with lower highs or lower lows.

Falling wedges are most likely to resolve when the price breaks above their upper trendline. Traders tend to look for a rise toward the level at which the distance between the upper and lower trendlines of the wedge is equal.

DOGE’s price follows a similar pattern. This is because it has increased its chances of continuing its uptrend after breaking above the trendline. The coin is now on track to reach $0.37, or approximately 150% higher than April 5, as illustrated in the chart below.

Weekly DOGE/USD price chart with falling wedge’s pattern. Source: TradingView

DOGE price downside risks

However, there are downside risks to the bullish setup. Dogecoin’s breakout move over the upper trendline of the falling wedge is accompanied by weaker volumes. This suggests that traders are not confident in the rally.

Related: What Elon Musk’s investment could mean to Twitter’s crypto plans

DOGE trades also below two critical support levels. The 20-week exponential moving Average (EMA) is around $0.15, and the 50-week EMA(the red wave), is close to $0.17.

Weekly price chart for DOGE/USD with moving average resistances, volume and daily chart. Source: TradingView

Dogecoin could pullback from these price ceilings to test its newfound support level. A prolonged decline could invalidate the bullish reversal setup.

DOGE’s $0.37 target would be maintained if the wedge’s trendline is held as support. Breaking above the 20- and-50-week EMAs with high volumes would help.

com. You should do your research before making any investment or trading decision.

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.