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Dogecoin (DOGE) Reverses After Elon Musk's Twitter Post, But Does It Have Any Chance?

Wed, 02/15/2023 - 17:00
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Arman Shirinyan
Crypto Market Review: Market is moving upward despite poor performance of past week
Dogecoin (DOGE) Reverses After Elon Musk's Twitter Post, But Does It Have Any Chance?
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Dogecoin has seen an uptick in price after Elon Musk's recent tweet featuring his new dog, Floki. The tweet was captioned, "The new CEO of Twitter is amazing," and quickly drew attention from the crypto community. Many speculate that the tweet may have contributed to Dogecoin's recent price increase.

The price of Dogecoin has been known to be influenced by Musk's tweets and comments, and this recent tweet is no exception. In the past, Musk has referred to Dogecoin as his favorite cryptocurrency and has tweeted about it numerous times, causing it to spike in value.

Following Musk's tweet, Dogecoin saw a reversal in its downward trend, moving upward from the $0.086 support level. Market sentiment has turned bullish, and many traders are now looking to buy DOGE in anticipation of further price increases.

Ethereum supply shrinking

Ethereum, one of the most popular cryptocurrencies on the market, has been experiencing a rapid drop in supply. This is due to the burn rate increase that is a direct result of the network's ascending activity. This drop in supply may lead to a shrinking of the available offering on the market, which could lead to a significant increase in Ethereum's price.
Source: Ultrasound.Money

The burn rate of Ethereum has reached a level that has not been seen before. This increase in the burn rate is not just adding some phantom value to the asset, but it may have a direct effect on the asset's performance on the market. The network activity is one of the primary reasons behind the increased burn rate.

The ascending network activity has led to a rapid increase in the number of transactions taking place on the Ethereum network. This is due to the rise of the DeFi market, NFTs and other innovative applications that are built on top of Ethereum. The increased activity on the network means more Ether is being used to pay transaction fees, and the increased demand is leading to a higher burn rate.

As the burn rate continues to increase, the supply of Ethereum is dropping rapidly. This is because the protocol has been designed to remove a small amount of Ether from the network each time a transaction occurs. This process is called Ether burning, and it is designed to keep the supply of Ether in check.

DXY brings hope back to market

The DXY index, which measures the strength of the U.S. dollar against a basket of other major currencies, has been facing fierce resistance on the market lately. This resistance might be a good sign for the cryptocurrency market, as it could lead to its recovery after a recent downturn.

DXY chart
Source: TradingView

The poor performance of the DXY index is beneficial for risk assets like cryptocurrencies because it indicates a decline in the value of the U.S. dollar, which makes riskier assets more attractive to investors. When the U.S. dollar weakens, investors tend to move their funds into other assets that provide higher returns, such as stocks, commodities and cryptocurrencies.

As the DXY index has been facing resistance, it is possible that investors will begin to shift their focus away from the U.S. dollar and toward other assets. This could lead to increased demand for cryptocurrencies, which could in turn drive up their prices.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.