Dogecoin price rallied for the third straight day as investors reflected on the nearing buyout of Twitter by Elon Musk. DOGE soared to a high of $0.081, which was the highest level since August 17. It has jumped by more than 53% from the lowest level this year.
Elon Musk Twitter buyout
Elon Musk is finally buying Twitter. According to the Wall Street Journal, banks have started to send $13 billion in cash backing the buyout. These banks are sending funds to an escrow account after hammering final details of the debt contracts. This means that the deal will close by the end of the week.
Elon Musk also held a brief meeting with Twitter employees on Wednesday. In it, he said that he will not implement the 75% layoffs that were rumored. Also, it is unclear whether the Biden administration will file to stop the transaction.
Dogecoin price needs a new catalyst
Musk’s acquisition of Twitter is important for Dogecoin because he is one of the biggest promoters of the coin. It is estimated that he is a big owner of the coin. Most importantly, he has said that he will incorporate the coin in Twitter.
The deal is also important because of how big Twitter is. Official numbers show that Twitter has over 237 million active users internationally. However, a recent report shows that the number of active users in the platform has been slowing recently.
Dogecoin price is therefore rising because of the enthusiasm about what Musk will do. This also explains why other coins like Bitcoin and Ethereum have risen in the past few days.
Another possible reason is that analysts expect that the Fed will start pivoting in the coming months. This could see it start reducing the size of its rate hikes.
Dogecoin technical analysis
So, is it safe to buy Dogecoin? The daily chart shows that the DOGE price has made a strong recovery in the past few days. It rose to a high of $0.081, which was the highest level since August 17. The coin has moved above the 25-day and 50-day moving averages.
Meanwhile, the Relative Strength Index (RSI) has moved to the overbought level. It also rose above the important resistance level at $0.068. Dogecoin price seems to be forming a shooting star pattern. Therefore, the coin will likely pull back and retest the support at $0.0650. A move above the resistance point at $0.081 will invalidate the bearish view.
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