Dogecoin Plummets As Investors’ Doubts After Musk Twitter Takeover Unfold
Investors are raising concerns about Elon Musk’s acquisition of Twitter. After soaring to a multi-week high price, the Dogecoin has crashed by 20% and is trading at $0.1381 with a total market cap of around $18 billion.
In an announcement on Monday, Twitter agreed to be acquired by Tesla and SpaceX CEO Elon Musk for $54 per share. This would give the company a value of more than $44 billion.
Related Reading | Dogecoin (DOGE) Struggles, Drops 9% After Elon Musk Twitter Buyout
Many people thought that Musk buying Twitter would help boost Dogecoin’s momentum. For 24 hours, it seemed as though they were right until the excitement and interest quickly dissipated from all sides.
Traders lost $281 million worth of “longs” to liquidation in the past 24 hours. Overall the total liquidation amount reached $350 million. This is the third-largest level in the month of April. Of that amount, about one-third ($128 million) came from bitcoin-tracked futures. While $92 million arose from ether futures. Futures tracking dogecoin lost $24 million, similar to Tuesday’s loss.
Doubts On Musk’s Twitter Acquisition
Some Twitter shareholders are concerned that the acquisition may not go through. For instance, their price per share is trading at $49, lower than offered ($54). In addition, the company currently has a market value of about $37 billion – $6 billion less than when this deal first began.
DOGE is currently trading at $0.138, losing its yesterday gain | Source: BTC/USD chart from Tradingview.com
The acquisition of Twitter by Tesla may have unforeseen consequences for the company, particularly its impact on Elon Musk. Many believe he will exit this deal by paying a $1 billion breakup fee.
China is the biggest market for Tesla, and the company has a large plant over there. So there’s a chance that if Musk tweets something unfavorable about China, the country can punish him. China has strict laws against free speech, and anyone who breaks them risks being penalized by law enforcement.
The fear that Musk will not buy Twitter has caused the Dogecoin price to crash. However, it’s believed most investors think if this acquisition closes, it’ll be good news for DOGE because he vows to add them as a payment option.
Related Reading | Institutional Investors Bearish On Bitcoin, Ethereum. Here’s What They’re Buying
Dogecoin Price Prediction
The graph shows that the price of DOGE has been slowly dropping since it hit a high of $0.1725. This is called a double-top pattern.
A double-top is usually a sign that the price will go down. The DOGE coin is now close to the 25-day and 50-day moving averages. In addition, the Stochastic Oscillator has moved above the oversold level. It means that the price will probably keep going down. The next key support level is $0.1100. If the price goes above $0.15, this will invalidate the bearish view.
Featured image from Pixabay and chart from Tradingview.com