Dogecoin, a popular cryptocurrency, fell a significant 4.5% following news that Elon Musk, the leader of the X platform, is preparing to testify again in a regulatory investigation into his acquisition of Twitter.
Dogecoin Value Falls Due to Elon Musk's Statement Status
This development created uncertainty over Dogecoin, a cryptocurrency that is frequently affected by Musk's social media comments.
Technical analysis shows Dogecoin being rejected at the 50-day Exponential Moving Average (EMA), a resistance level that the bulls have struggled to overcome. This level currently acts as a ceiling for possible upward moves.
At the same time, trading volume shows a decreasing trend, indicating a possible consolidation phase or waning interest, which could lead to further price movement.
The 200-day EMA ($0.074) is highlighted as the next important support level for Dogecoin. If the price falls to this level, it could potentially face strong buying interest that could halt the decline and stabilize the price.
Investors' primary concerns lie in the potential legal ramifications of Musk's statement. If Dogecoin is classified as a security during transactions, it could face strict regulations that could hinder market performance and investor sentiment.
If Dogecoin manages to maintain its position above the 200-day EMA and deflects negative sentiment from Musk's legal status, it could potentially see a rebound.
However, a bearish scenario could emerge if the asset fails to maintain the 200-day EMA support, possibly leading to a decline towards lower support levels around $0.065.
*This is not investment advice.