Dogecoin, a cryptocurrency that started as a joke, has been in the news recently due to its surging price and its association with Tesla CEO Elon Musk. On-chain data vendor Santiment recently published an analytics report focusing on the surge and its connection to Musk’s recent tweets.
The report highlights that Musk’s changing of the Twitter icon to a picture of Dogecoin has been driving attention to the cryptocurrency. Musk has been a vocal supporter of Dogecoin and has tweeted about it several times.
The surge in Dogecoin’s price began when Twitter changed its logo to a picture of Dogecoin. This caused the price of the meme token to surge by roughly 33% and decouple from the rest of the crypto market for a while. The market cap of Dogecoin also surged from $10.9 billion to $13.3 billion in less than 24 hours.
Santiment also speculates that the whales close to Elon Musk were aware of this move and cashed in on it. It is speculated both these whales and Elon Musk might have benefited from this move financially. However, there is no real evidence that proves these speculations.
The report warns that last year, after two massive surges of Dogecoin social sentiment, the price showed heavy corrections. It suggests that major players who likely knew about the planned Dogecoin pump got out of the asset or took heavy profit. Santiment shared a chart showing a large number of top signals indicating when these players were getting out of the asset or at least taking a heavy profit.
As Dogecoin skyrockets, decoupling from the rest of the crypto market, a local top was formed, so “profit taking is a wise decision,” Santiment commented, and the aforementioned players did that immediately. The report also notes that the level of Dogecoin mentions across various social media platforms spiked. Many crypto analysts warned that last year, the same thing happened twice, and after these massive surges of Dogecoin social sentiment, the price showed heavy corrections.
The report suggests that caution should be exercised as the price of cryptocurrency can be volatile. It advises the level of Dogecoin mentions across social media platforms should be monitored to determine the sentiment around the cryptocurrency.
While whales were also accumulating, the report suggests that they were likely people close to Elon Musk and the CEO of Twitter, who may have made substantial profits during the surge. However, the report emphasizes that it is merely speculation without knowing the owners of these addresses.
However, despite the cautionary tone of the report, many investors and traders remain optimistic about Dogecoin’s future. Some are predicting that it could become a major player in the cryptocurrency market, while others are speculating that it could eventually reach the same level of success as Bitcoin or Ethereum.
Regardless of what happens in the future, it is clear that Dogecoin has captured the attention of the cryptocurrency world, and its association with Elon Musk has only added to its mystique. Whether it will continue to rise in value or suffer a correction remains to be seen, but for now, Dogecoin remains one of the most talked-about cryptocurrencies on the market.