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Elon Musk teases with dogecoin Tesla tweet as cryptocurrencies slump

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Tesla CEO Elon Musk asked on Twitter: 'Do you want Tesla to accept Doge?' Photo: Reuters
Tesla CEO Elon Musk asked on Twitter: 'Do you want Tesla to accept Doge?' Photo: Reuters

Cryptocurrencies bitcoin and ethereum were down on Tuesday morning but dogecoin was up, as Elon Musk tries to keep the conversation around the joke token alive.

Dogecoin (DOGE-USD), which had taken a beating over the weekend following Tesla (TSLA) CEO's appearance on Saturday Night Live, fell again earlier in the day but then pared its losses as Musk tweeted yet again about the crypto.

At the time of writing, dogecoin was trading at $0.5236, up about 1%. It had fallen as low as $0.4439 earlier in the day.

In the past, it has rallied every time Musk has tweeted about it and it appears he wants to keep this momentum going. 

Read more: Elon Musk SpaceX Dogecoin tweet fails to spur price

He tweeted: "Do you want Tesla to accept Doge?" About an hour after creating the poll on Twitter, he had some 1,190,035 votes, with roughly 77% of respondents saying "yes".

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Tesla already accepts bitcoin as a form of payment for its products. That, along with Tesla investing in bitcoin, had sent the crypto soaring in March.

A tweet from Musk on Monday saying that his SpaceX company would accept dogecoin to fund a lunar mission next year failed to spur the price of the cryptocurrency.

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Over the weekend, analysts had expected Musk to mention the meme-inspired crypto on the show and send prices spiking, instead his plug saw the coin crash nearly 25% from $0.69 to $0.48 a few minutes into his stint.

Dogecoin pared losses after Elon Musk's tweet. Chart: Yahoo Finance UK
Dogecoin pared losses after Elon Musk's tweet. Chart: Yahoo Finance UK

"It is highly likely that Elon’s recent tweet is going to be matched up with another positive tweet and Tesla may end up accepting dogecoin," Naeem Aslam, chief market analyst at Ava Trade told Yahoo Finance.

Earlier, Aslam had said "it is still widely believed that the fourth-biggest coin by market cap still has the ability to touch the one dollar mark as there is massive support among retail traders who are betting their savings on this."

READ MORE: Global markets sell off on inflation fears

Meanwhile bitcoin (BTC-USD) moved roughly 4.4% lower and was trading at $55,737.21 (£39,450.52). 

"Parabolic jumps in digital tokens such as ether, dogecoin and binance coin are outshining bitcoin, prompting more questions about whether that segment of the cryptocurrency sector is ripe for a reckoning," Al Jazeera had earlier reported.

"The rallies have contributed to a slump in bitcoin’s share of the $2.6 trillion crypto market to 43% from about 70% at the start of 2021," it added.

WATCH: What is bitcoin?

Ethereum (ETH-USD) fell 3.9%, following a rally that had seen its price break through $4,000 for the first time on Monday. At the time of writing it was trading at $3,954.55.

Read more: Cryptocurrency ethereum breaks $4,000 mark as it hits record high

"Cryptos are down mainly because the crypto king has failed to keep momentum," said Aslam.

"We had so much positive news about bitcoin for the past few weeks but despite this, we have not seen any significant moves in bitcoin. This shows that bull rally is out of steam."

Aslam had earlier said speculators believe ethereum is "due a healthy correction" although he added this was "more likely that it may take place when the price touches the 5K price."

He also said "there is no doubt that ethereum is going to touch the 5K price level, a price target that we talked about several times before. The long-term price target for Ethereum is still at 10K."

The volatility in the crypto markets comes as Cboe Global Markets seeks to list a Fidelity Bitcoin exchange-traded fund in the US "despite the prospect of an icy regulatory reception," according to a Bloomberg report.

A sell-off in tech stocks weighed down major US indices overnight as investors braced for inflation data.

Analysts are expecting data on Wednesday to show that headline US prices rose 3.6% year-on-year in April, according to FT.

WATCH: What are the risks of investing in cryptocurrency?

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