DOGE, up 2.5% following X CEO's late October tweet

DOGE Price Moves as Musk’s October Tweet Sparks Fresh Hype

It’s hard to think of Dogecoin without Elon Musk surfacing in mind. And at this point, it’s even useless to do so, since an A-lister of his prominence continues to tweet and make remarks about Dogecoin – and crypto, overall – leaving audiences grasping with the aftereffects of his words. High-ranking celebrities may not seem the most trustworthy figures to promote things like a medium-priced hair shampoo or ice cream, but when it comes to the overwhelmingly intricate financial sector, a tech buff is sure to seem to know a thing or two – information the everyday social media user feels encouraged to store in mind. Here, it’s important to remember that a celebrity’s remark on a topic can open the room for misinformation to spread, too.

So, what did X CEO, Elon Musk, feel like sharing with his followers? What’s a celebrity's impact on crypto, and particularly, on the Dogecoin price? We’re answering some of the most pertinent questions right below, starting from Dogecoin’s roots and ending with your thoughts. Let’s begin, shall we?

Photo source: https://unsplash.com/photos/gold-and-silver-round-coin-J_kuE_dcsb8

The DOGE that can’t be caged

A project that’s set to thrive will most likely eventually thrive. Or, at least, this is the story of Dogecoin, the cryptocurrency that emerged in 2013 as a joke intended to poke fun at Bitcoin and the entire digital currency concept – which software devs Jackson Palmer and Billy Markus found evidently silly. However, it appears not entirely silly, since they have started working on a concept of a similar nature. They took the open-source code used in Litecoin, leveraging its proof-of-work consensus model and Scrypt algorithm, then added the internet meme that made ravages in 2013, the Shiba Inu dog named Kabosu. Additionally, the newfangled project received a text with the Comic Sans theme font and broken English. This marks the beginning of a phenomenon that would become a cultural cornerstone of cryptocurrency.

Regarding Dogecoin’s technical scope, it was designed to be easier and cheaper to access compared to the foremost crypto, Bitcoin, and to raise awareness of the underlying technology, blockchain. Ever since these cryptos broke out, blockchain technology has managed to revolutionize multiple industries, from healthcare to entertainment to cybersecurity. It’s basically a ledger that records data stored in blocks, creating files that are immutable and impossible to delete. The jest somehow turned into a $25BN jest in 2021, when it recorded its all-time high.  

There’s no entity or CEO behind Dogecoin – just a huge and devoted community that keeps its spark alive.

Then came the twist – Elon Musk

Then-CEO of SpaceX and Tesla, Elon Musk, entered the stage in April 2019 when he casually tweeted about Dogecoin being his favorite cryptocurrency. As per his words, he considered it to be “pretty cool”. Bitcoin became an object of focus for Elon, too, who found it “quite brilliant”, but too energy greedy. His first tweet about the coin expressed his preference for the meme coin, which created a ripple effect and started the coin’s engine, which later got to rally on his favoritism.

Nevertheless, it’s important to note that even if the tycoon’s 2019 tweets about Dogecoin did cause a spike in interest, they didn’t lead to the massive price fluctuations. It was a period of initial, rather than intensive, public promotion. And it was a moment that harbingered a tsunami; over the following two years, Elon’s tweets, memes, and spontaneous remarks sent DOGE skyrocketing, all the way from less than $0.004 in 2019 to 2021’s $0.73.

Elon’s cryptic late October message

Dogecoin experienced a notable 2.5% gain and rose to $0.20 after the X CEO uploaded a picture featuring the Shiba Inu dog on his profile on October 20 of this year. This is reminiscent of the times when Musk’s tweets fueled Dogecoin’s rallies – not once, but multiple times in the past. The most recent increase came after Dogecoin had already risen from a current low of $0.13, signaling a 55% rise in just half a month, with improving market sentiment and tech indicators that started indicating bullishness again.

The surge underscores just how deeply social sentiment (e.g. memes, tweets) shapes meme coin performances. Unlike Bitcoin, Ethereum, XRP, and other assets with solid fundamentals, DOGE trades on cultural momentum, humor, and hype. Analysts warn that such volatility highlights the importance of tighter risk controls, such as lower leverage and clear risk limits, to protect themselves from the market reactions triggered by Musk. But even so, Dogecoin’s high liquidity continues to attract traders looking to profit from these Musk-driven waves.

Tweets that ignite debates 

Of course, seasoned traders aren’t stepping into uncharted territory – Musk dropped numerous tweets that have triggered dramatic rallies before. Each episode sparks conversation about how mature the market really is and whether a single, powerful voice should wield such sway over investors – retail investors (like you, probably).

Risks to keep in mind

All this type of celebrity-driven hype can make it easy to sugarcoat the risks brought about meme coins like Dogecoin and Shiba Inu. But the fact that meme coins are built on pure fun and social media hype makes them way more susceptible to price fluctuations – changes that can have a direct impact on the value of a portfolio holding these assets. 

Three big reminders. 

Unlike Ethereum, Bitcoin, Solana, etc., this coin is a nostalgia breakthrough basking in dicey popularity. Can DOGE rise to $0.8, $1, or $1.5? Only time will tell. Here are some of the weightiest risks to acknowledge:

• Dogecoin lacks a solid value proposition other than its comic side – this is an advantageous aspect for traders, not long-term investors;

• Liquidity tends to dissipate when hype cycles disappear and sales lead to price drops, which can make investors quit their positions out of fear of losing even more;

• The same celebrity who promotes a cryptocurrency can be the one who whispers its demise if they neglect it afterwards. It’s a game of luck.