Dogecoin’s price contracted sharply as investors reacted to uncertainty surrounding Elon Musk’s planned acquisition of Twitter. After climbing to a multi-week high of $0.1715 on Tuesday, the coin fell roughly 20% to trade around $0.1381, leaving its market capitalization near $18 billion.
Questions Surrounding Elon Musk’s Twitter Takeover
On Monday, Twitter announced that Elon Musk, CEO of Tesla and SpaceX, had agreed to buy the company. The deal price was $54 per share, valuing Twitter at just over $44 billion.
However, doubts have emerged about whether the transaction will be completed. Twitter’s share price is trading near $49, below the agreed acquisition price. That puts the company’s market value at about $37 billion, more than $7 billion under the purchase price.
Some observers believe Musk might walk away from the deal and pay a $1 billion termination fee, arguing that owning Twitter could create unexpected complications for Tesla and other companies he controls.
One concern is Tesla’s exposure to China, a critical market with large manufacturing facilities and major parts sourcing. Given China’s strict controls on expression, critics suggest there is a risk of regulatory or political consequences if Musk’s tweets provoke unfavorable attention.
As a result, Dogecoin’s price fell amid growing fears that Musk might not complete the Twitter purchase. Many investors had expected the acquisition to be bullish for Dogecoin, since Musk had indicated support for adding it as a payment option.
Dogecoin Price Outlook
The daily chart indicates Dogecoin formed a double-top near $0.1725, a pattern often associated with bearish reversals. The price has since moved toward the 25-day and 50-day moving averages, while the Stochastic Oscillator has moved above oversold territory. This technical picture suggests further downside risk, with bears targeting the next major support near $0.11.
A sustained move above resistance at $0.15 would invalidate the bearish outlook. Traders and investors should watch these key levels closely as momentum and market sentiment continue to react to developments around the Twitter deal.