Why is Dogecoin pumping? On Chain and Technical Analysis

Dogecoin has risen more than 15% in the past 24 hours and more than 40% in the past 7 days. It has risen after Elon Musk tweeted that Twitter would support payments straight from his Twitter handle.

We will also have a look at on-chain and technical analysis to see if the move has any serious potential.

Elon Musk’s Tweet

On November 27, 2022, Elon Musk tweeted about his talk with Twitter Executives. He shared an image that showcased near-future developments for Twitter. The topics were

  • Encrypted Direct Messages
  • Allowing Long Form Content
  • Relaunch of Paid Verification
  • Payments

It is the fourth slide that caught everyone’s attention. Elon Musk is known to be a pro-crypto person. He has earlier shown support for Dogecoin.

His first Tweet about Dogecoin came in 2019 when he expressed his fascination with it. He has been tweeting about Dogecoin in multiple instances, After his Twitter takeover, Musk shared the following picture, which gave rise to further speculation that Musk would make Dogecoin the official cryptocurrency for Twitter.

Elon Musk's Nov 1, 2022 Tweet on Dogecoin and Twitter
Elon Musk’s Nov 1, 2022 Tweet

Should I buy $DOGE?

On-Chain Analysis

On-Chain data suggests that more than 60% of addresses holding $DOGE are profitable. This is worse in Bitcoin and other cryptocurrencies, where most holders are at a loss.

percentage of Dogecoin Addresses in Profit
Percentage of Dogecoin Addresses in Profit

Further, the number of transactions on the chain has increased by about 10%. On November 20, the blockchain recorded 21.53 Thousand transactions. It increased to 24.43 Thousand transactions on November 26.

Number of Dogecoin Transactions in Last Week
Number of Transactions in Last Week

There is clearly momentum, but sustained momentum is not visible in on-chain data. Considering strong technical indicators, users are best advised to use DOGE for short-term play.

Technical Analysis

Daily charts suggest that the cryptocurrency might rally even further as RSI, Volume, and MACD appear to be in favor.

Dogecoin Daily Charts
Daily Charts

Relative Strength Index (RSI) has just pierced 60 from the downside, indicating strong price momentum.

Volumes have risen in the past few days. The rise of price with volume indicates a wide rally and not by select few people.

MACD has already given a positive crossover which shows that near-term price momentum will remain strong.


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