On December 21, 2017, Elon Musk tweeted, “I love Twitter.” To which, an employee of Business Insider tweeted back saying: “You should buy it then.” Four years later, after a week-long drama and many twists and turns, Tesla CEO Elon Musk has officially acquired the micro-blogging platform, Twitter, for approximately $44 billion. Tech stocks rejoiced at the announcement by a late revival on Wall Street despite global growth fears fuelled by increasing COVID-19 cases in some parts of the world. Twitter, with close to 400 million users, was also widely used by crypto enthusiasts to share memes, launch non-fungible token (NFT) projects, and create awareness on crypto. As a result, the global crypto market capitalisation rose by 5% assisted by a substantial 30% increase in volumes in the last 24 hours.
In this article, we will take a brief look at the price actions of Bitcoin (BTC) and Dogecoin (DOGE) along with short-term outlook for BTC.
BTC saw a 30% spike in trading volumes from the previous day which has subsequently driven the price above $40,000. BTC, which was trading near the $38,000 region, got the much-needed boost from the Twitter announcement, reversing the downtrend fairly quickly. However, BTC is still trading in a region where it has spent most of its time in 2022.
All the major moving averages (MA) are currently acting as major resistance levels in the short term. The 20-day simple and exponential MA has formed at $40,700 and $41,010 respectively. On top of this, there are horizontal resistance zones along its way near the $42,000 region if BTC were to attempt an uptrend. BTC is trading at $40,500 with a 24-hour gain of 5%.
Ever since Musk expressed his fealty through a Lion King meme to Dogecoin (DOGE), the price of DOGE had gone on an absolute tear before a brutal 70% pullback from its all-time high.
Despite multiple announcements surfacing later regarding the acceptance of DOGE as a payment option by the likes of Tesla, AMC entertainment and many more companies, DOGE has failed to deliver any major gains for its investors. Post Musk’s Twitter acquisition, DOGE was quick to react by gaining 30% from the previous day to become the 10th largest crypto asset in terms of market cap. DOGE daily trade volumes soared by 800% to approximately $6 billion. But the question of whether DOGE will continue to sustain the move and deliver great returns in the future remains unanswered.
The short-term price movements of BTC has been in tandem with the Nasdaq. And Nasdaq, in turn, is inversely correlated with the movement of US dollar (DXY). Risk-off assets such as US government 10 year bond yields have been on an uptrend, indicating a reluctance of investors to take risks. With US Federal Reserve’s interest rate hikes on its way, BTC will continue to experience sell-offs at overhead resistance levels. While relief rallies can be expected along the way, the sentiment remains largely bearish for the next 3 months.
Of course, markets are unpredictable and a black swan event (like Russia-Ukraine conflict) can quickly change the forecasts. Therefore, crypto market participants are advised to approach their trades and investment strategies with extreme caution accounting for sudden market uncertainties.
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Disclaimer:This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.