Dogecoin (DOGE) prices rose substantially on Friday when Elon Musk announced that Tesla would start accepting it as payment for merchandise.
Tesla merch buyable with Dogecoin
— Elon Musk (@elonmusk) January 14, 2022
Tesla merchandise can now be purchased with Dogecoin.
After the announcement, the DOGE price jumped nearly 13%, hitting a 30-day high at $0.2150. His move higher came as part of a larger intraday rally that was already taking place before Musk’s tweet about Dogecoin went viral.
DOGE price rose more than 25% on Friday before correcting lower to $0.1986 on profit-taking.
better than bitcoin
Tesla’s integration of a DOGE payment option into its online shopping portal came nearly a month after Musk shared his willingness to accept the cryptocurrency as payment on a trial basis.
At the core of Musk’s love for DOGE was its “better-than-Bitcoin” features, primarily as a payment option due to its lower electricity consumption. In excerpts from Musk’s statements to Time magazine, he explained that:
“Fundamentally, Bitcoin is not a good substitute for transactional currency. Although it was created as a silly joke, Dogecoin is more suitable for transactions.”
The billionaire businessman further underlined that Bitcoin’s cost per transaction is high while its transactional volume is low compared to DOGE. As a result, Bitcoin might be fine as a store-of-value asset. On the other hand, DOGE could continue to encourage people to spend.
What’s next for DOGE?
The latest round of buying in the Dogecoin market eased a bit as DOGE tested a multi-month resistance trend line for a breakout of the top.
In detail, DOGE’s price rally crashed into a descending trendline resistance that had been limiting its upside attempts since May 2021. On Friday, the trendline was decisive again to send DOGE off its intraday high. from $0.2150 to $0.1958, as shown in the chart below.
Meanwhile, Dogecoin’s 200 day exponential moving average (200 day EMA; the orange wave) also played a key role in capping its gains on Jan 14. Taken together, the confluence of resistance hinted that DOGE price may retrace from its ongoing uptrend in the coming sessions.
Should this occur, the token would look poised to test its 50-day EMA (the velvet wave) as support, with the possibility of extending its correction towards $0.1367 due to its recent history as support.
Conversely, a decisive break above the downtrend line resistance and the 200-day EMA could see traders eye $0.30 as the next upside target in the Dogecoin market. The area around the $0.30 level had previously served as resistance.
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