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Elon Musk's Twitter purchase sustains Dogecoin rally

ANKARA, TURKIYE - OCTOBER 06: In this photo illustration, Elon Musk's twitter profile is displayed on a mobile phone and the image of him is seen on a computer screen on back of it in Ankara, Turkiye on October 06, 2022. Muhammed Selim Korkutata / Anadolu Agency
Elon Musk's purchase of Twitter was finalised last week. Photo: Muhammed Selim Korkutata / Anadolu Agency

Dogecoin continued its rally on Monday reinforcing last week's buying frenzy that was triggered by Elon Musk's purchase of Twitter.

Dogecoin (DOGE-USD) outperformed all other blue-chip cryptocurrencies last week after Musk took hold of the reins of Twitter (TWTR).

Friday's finalisation of Musk's Twitter purchase was a catalyst for a memecoin breakout, with dogecoin leading the pack.

Dogecoin rose by over 104% last week, but early on Monday, the premier memecoin price dipped.

However, this was only a temporary fall as strong investor buy-in saw the price swing higher again to over $0.12.

Across multiple cryptocurrency exchanges over $4bn dogecoin short positions have now been liquidated, according to data from coinglass.com.

UKRAINE - 2021/11/23: In this photo illustration, a Dogecoin sign of a cryptocurrency is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Dogecoin outperformed all other blue-chip cryptocurrencies last week. Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

On Monday, veteran trader Peter Brandt warned investors to be wary of the alpha memecoin's latest rally.

He cautioned against interpreting this price explosion as the beginning of a bull market and tweeted: "A common mistake made by novice and wannabe traders is assuming that an end to a bear phase of a market is automatically a signal that a bull market has begun.

"This assumption is most often wrong."

Check: Crypto live prices

The comments followed an earlier tweet in which the veteran trader described last week's dogecoin price action as nudging the memecoin out of its prolonged 'bear channel'.

According to veteran trader Peter Brandt chart analysis shows that dogecoin has been in a 'bear channel' since May 2021.

On Sunday he tweeted: "This is called a bear channel, the upside violation of which has ended the bear market that began at the May 2021 high $DOGE."

The recent dogecoin pump has been attributed to 'the Elon effect' stemming from the Tesla CEO buying Twitter.

Musk tweeted on Friday that Twitter will form a content moderation council "with widely diverse viewpoints".

Last week, the Twitter-sphere was embroiled in speculation that Musk would reinstate former US president Donald Trump's Twitter account.

However, Musk added that no major content decisions or account reinstatements will happen before the council convenes.

The billionaire in a tweet on Saturday said that Twitter users could in future choose a version of the social media platform they like by providing ratings on their tweets.

He added: "Being able to select which version of Twitter you want is probably better, much as it would be for a movie maturity rating."

However, the Tesla boss came under fire after tweeting a link to an article with an unfounded theory about the “life-threatening” hammer attack on Paul Pelosi, the husband of US House of Representatives speaker Nancy Pelosi.

The tweet, which he later deleted, linked to an article that made unsubstantiated claims about Paul Pelosi’s personal life and the role it may have played in last week’s attack at his and his wife’s home in San Francisco.

The article linked to in the tweet was from the Santa Monica Observer, an outlet that had previously made the outlandish claim that Hillary Clinton died on 11 September and was replaced with a body double.

Other cryptocurrencies rallied on Monday, with the entire crypto market cap ascending to $1.07 Trillion, a gain of 0.7% in the past 24 hours.

Bitcoin (BTC-USD) made a bullish move up 6.3% in the past week to $20,800, whilst ethereum (ETH-USD) also rose to $1,626, up almost 20% in the past week.

Bitcoin usually moves in correlation with equities such as the S&P 500 (^GSPC) and Nasdaq (^IXIC).

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