Dogecoin has crashed 75% against Bitcoin since Elon Musk’s SNL appearance
Dogecoin (DOGE) may be back in the top ten cryptocurrencies by market capitalization, but the losses in both USD and Bitcoin (BTC) since Elon Musk’s SNL appearance are significant.
Dogecoin is losing the Musk effect
The DOGE/BTC trading pair has fallen 75% after hitting a high of 1,287 satoshis on May 9, 2021, a day after Musk guest-hosted Saturday Night Live, including a skit titled “The Dogefather.”
Before his appearance, the billionaire entrepreneur relentlessly tweeted Dogecoin memes, images, which helped DOGE — a cryptocurrency that started as a joke — reach a market cap north of $90 billion by May 2021.
That’s more than a 36,000% gain in just two years. But it’s been downhill ever since.
Investors reflected hopes that even an upbeat wink from Musk on SNL at DOGE would prompt his 106 million followers to buy the meme token. But Musk did an unpredictable thing: he called Dogecoin a “hustle”.
A day later, DOGE’s price began to fall from a record high. It continues its downtrend until today, changing hands for around 300 satoshis against its peak value of 1287 satoshis.
At the same time, the price of Dogecoin has crashed by more than 90% against the US dollar after reaching a peak of $0.76 in May 2021.
Elon Musk’s efforts to keep Dogecoin relevant
Musk has made several efforts to revive people’s interest in Dogecoin since then.
In May 2021, he revealed he had been working with Dogecoin developers to improve the blockchain’s transaction efficiency since 2019. In addition, Musk’s Tesla and SpaceX also began accepting DOGE payments for their goods, leading to a sharp but short-lived price increase.
Also, during a market crash in March 2022, Musk stated that he would not sell his crypto holdings, including DOGE and Bitcoin. Still, Tesla sold 75% of its Bitcoin holdings three months after Musk’s announcement.
As a general principle, for those looking for advice from this thread, it’s generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.
I still own and will not sell my Bitcoin, Ethereum or Doge fwiw.
— Elon Musk (@elonmusk) 14 March 2022
The prospect of adding a DOGE payment option to Twitter also collapsed after Musk backed out of buying the social media giant.
In September 2022, Tesla launched the Cyberwhistle, a limited edition inspired by the Cybertruck vehicle, which users can only purchase via Dogecoin.
Will Dogecoin bounce back, then?
Traders have begun to ignore Musk’s famous connection to Dogecoin, given their half-hearted reactions to DOGE-related updates of late.
Instead, traders appear to have been more focused on macro catalysts of late, primarily the Federal Reserve’s back-to-back interest rate hikes that have put downward pressure on cryptocurrencies, stocks and similar risk assets in 2022 and beyond.
Related: Dogecoin Becomes Second Largest PoW Cryptocurrency
The technical setups also indicate the same. For example, on the weekly chart, DOGE/BTC is now testing 307 satoshis as its temporary support, given the level’s history as a strong price floor since November 2021.
A decisive break below 307 satoshis would see DOGE/BTC test its 200-week exponential moving average (200-week EMA; the blue wave) near 244 satoshis as a downside target in 2022 – a 20% decline.
A decrease of 40% against the dollar
The DOGE price has been trending within a broad descending channel against the US dollar since its peak in May 2021, and is now looking at the lower trendline as the next downside target.
The target appears to be in the area defined by $0.048 and $0.036, given the history of these levels as support. Therefore, DOGE could fall by approximately 40% against the dollar in the fourth quarter of 2022.
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