It’s amazing how much prices can change in a matter of hours. On Monday, rumors of Elon Musk’s purchase of Twitter sent Dogecoin (DOGE) near yearly highs. As of Tuesday night, Musk’s favorite cryptocurrency had lost a good chunk of its gains. What happened ?
Since Tuesday, the whole market has been falling and the most coveted cryptos have almost all dropped in price. Fears of an escalation of the conflict between Russia and Ukraine are heightened. In an interview with Russian diplomat Sergey Lavrov earlier this week, he said the risk of nuclear war was very real.
Buy the rumor, sell the news!
The Dogecoin decline is also in itself a classic phenomenon defined by the adage: buy the rumor and sell the news. It is a subtle phenomenon, difficult to put into practice in real trading conditions.
Rumors and Elon Musk’s intention to buy Twitter led investors to anticipate a rise. However, on Tuesday morning, the Dogecoin has stagnated a bit at the resistance level. This has resulted in the exit of many investors who no longer believe that the rise will continue. DOGE/USD falls accordingly.
It would be a big step forward for the DOGE if Musk includes it in his ambitions for Twitter. Even though. Memecoin followers are banking on acceptance of Dogecoin as a payment method on Twitter, it’s too early to tell how this will turn out, one thing is clear, this event showed that even though Dogecoin is down 80% from compared to its all-time high, it retains a strong community.