The Dogecoin price has recoiled sharply as investors raise doughts about Elon Musk’s acquisition of Twitter. After soaring to a multi-week high of $0.1715 on Tuesday, the coin has crashed by 20% and is trading at $0.1381, bringing its total market cap to about $18 billion.
Doubts about Elon Musk Twitter purchase
On Monday, Twitter announced that it had accepted to be acquired by Elon Musk, the CEO of Tesla and SpaceX. The agreed price of the deal was $54 per share, which would value the compay at more than $44 billion.
However, there are concerns about whether the deal will go through. For one, the Twitter stock price is trading at $49, which is lower than the acquisition price. The company is currently valued at about $37 billion, which is over $7 billion below its acquisition price.
There is a belief that Elon Musk will exit the deal and pay the $1 billion break-up fee. This is simply because acquiring Twitter will have unintended consequences for Tesla and other companies owned by Musk.
For one, Tesla’s biggest market is China, where it also owns a large plant. The company also buys most of its input from China. Now, China is a country known for its crackdown of free speech. Therefore, there is a likelihood that it will work to punish Musk in case of any unfavourable tweets.
Therefore, the Dogecoin price has crashed because of the rising fear that Musk will not buy Twitter at all. Most investors believe that if the acquisition closes, it will be a good thing for Dogecoin because Musk has vowed to add it as a payment option.
Dogecoin price prediction
The daily chart shows that the DOGE price has formed a double-top pattern at $0.1725. A double-top is usually a bearish sign. It has now moved to the 25-day and 50-day moving average while the Stochastic Oscillator has moved above the oversold level. Therefore, the coin will likely keep falling as bears target the next key support level at $0.1100. A move above the resistance at $0.15 will invalidate the bearish view. Here’s how to buy Dogecoin.