Dogecoin (DOGE) prices rose significantly on Friday as Elon Musk announced that Tesla would start accepting it as payment for goods.
Tesla merchandise purchasable with Dogecoin
— Elon Musk (@elonmusk) January 14, 2022
Following the announcement, DOGE price jumped almost 13%, hitting a 30-day high at $0.2150. Its move higher came as part of a larger intraday rally that was already taking place before Musk’s Dogecoin tweet went viral.
DOGE price rose more than 25% on Friday before correcting lower to $0.1986 on profit taking.
Better than bitcoin
Tesla’s integration of a DOGE payment option on its online shopping portal came nearly a month after Musk signaled his willingness to accept cryptocurrency as payment as a form of payment. test.
Central to Musk’s love of DOGE were its “better than Bitcoin” features, primarily as a payment option due to its low electricity consumption. In excerpts from Musk’s statements to Time Magazine, he explained that:
“Basically, Bitcoin is not a good substitute for transactional currency. Even though it was created as a silly joke, Dogecoin is better suited for transactions.”
The billionaire entrepreneur further pointed out that Bitcoin’s cost per transaction is high while its transactional volume is low compared to DOGE. As a result, Bitcoin could well be a store of value asset. On the other hand, DOGE could continue to encourage people to spend.
What’s next for DOGE?
The latest round of buying in the Dogecoin market has calmed down somewhat as DOGE tested a multi-month resistance trendline for a break up.
In detail, the DOGE price rally was sunk into descending trendline resistance that capped its upside attempts since May 2021. On Friday, the trendline became key again to send DOGE off its intraday high of 0, $2150 to $0.1958 as seen in the chart below. .
Meanwhile, Dogecoin’s 200-day exponential moving average (200-day EMA; the orange wave) also played a key role in limiting its gains on January 14. Together, the confluence of resistance hinted that DOGE price may pull back from its ongoing uptrend in the coming sessions.
Related: Dogecoin creator slams Mozilla for suspending crypto donations
If that happens, the token will look set to test its 50-day EMA (the Velvet Wave) as support, with the possibility of extending its correction towards $0.1367 due to its recent history as support.
Conversely, a decisive break above the descending trendline resistance and the 200-day EMA could lead traders to consider $0.30 as the next upside target in the Dogecoin market. The area surrounding the $0.30 level previously served as resistance.
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