Dogecoin [DOGE] decouplings: Does Elon Musk have a role to play?

Published in: May 5, 2024

• DOGE price rose more than 7% in the last 24 hours.
• Most market metrics and indicators supported the bullish trend.

The cryptocurrency market turned somewhat bearish in the last 24 hours, but Dogecoin [DOGE] managed to paint his daily chart green.

Although there may be multiple factors at play, one possible reason could be attributed to Elon Musk.

Dogecoin remains bullish

The last 24 hours were not very volatile for major currencies such as bitcoin [BTC] and Ethereum [ETH]since their prices only varied marginally.

On the other hand, Dogecoin defied the market trend as its value increased by more than 7% in the last 24 hours.

According CoinMarketCapAt the time of writing, DOGE was trading at $0.1616 with a market capitalization of over $23 billion, making it the eighth largest cryptocurrency.

DOGE’s trading volume also increased along with its price, acting as a foundation for the bullish rally.

A possible reason behind this trend could be Tesla’s recent announcement. The firm recently updated the FAQ section on its website and stated that DOGE can now be used to purchase even more Tesla products.

Shortly after this, Dogecoin’s social metrics increased.

AMBCrypto’s look at Santiment data revealed that DOGE social volume skyrocketed. The weighted sentiment also improved, meaning that the bullish sentiment around the coin was dominant in the market.

Elon Musk has a history of influencing the price of Dogecoin on multiple occasions in the past. Therefore, DOGE’s latest bullish rally could also be a result of Tesla action.

Will this bullish rally last?

Since the bullish rally could have occurred due to Tesla-related hype, AMBCrypto checked DOGE metrics to see if the metrics supported this bullish trend.

According to our analysis, DOGE’s open interest increased along with its price. An increase in the metric indicates that the chances of the current trend continuing are high.

The MVRV ratio of the meme coin also entered the positive zone. At the time of writing, DOGE’s MVRV ratio was worth 2.22%, indicating a further price increase.

In fact, AMBCrypto reported that the demand for DOGE was increasing. On May 2, 28,000 new addresses were created to trade DOGE, which is a 102% increase from the monthly low.

However, its NVT ratio also skyrocketed, meaning DOGE was overvalued. This hinted at a possible price correction.

Realistic or not, here it is DOGE market capitalization in BTC terms

To see if a price correction is coming, AMBCrypto checked the daily Dogecoin chart. We found that the relative strength index (RSI) of the coin recorded an increase.

Its MACD also showed a bullish crossover, hinting at a continued price rise. However, the money flow index (MFI) remained bearish as it was below the neutral mark.

This is an automatic translation of our English version.