Dogecoin price risks 40% correction despite Elon Musk-Twitter euphoria

Dogecoin (DOGE) prices flipped higher successful the past 24 hours aft its astir celebrated backer Elon Musk purchased Twitter for $44 billion. At its best, Dogecoin had climbed to $0.17 connected April 25, albeit inactive down 77% from its grounds precocious successful May 2021.

Twitter's autochthonal currency: Dogecoin?

DOGE's terms roseate by astir 25% to $0.15 connected a 24-hour adjusted timeframe, confirming that traders considered Musk's acquisition of Twitter a bullish lawsuit for Dogecoin.

The reason: Musk's long-time enactment for DOGE, including his recent advice to the Twitter committee that they commencement accepting the meme-crypto for Twitter Blue, their first-ever subscription service.

The comments appeared a twelvemonth aft Twitter revealed that it plans to treble its revenues to $7.5 cardinal by the extremity of 2023, raising hopes Musk's 100% ownership of the institution would person it facilitate its aboriginal income done an further DOGE outgo option.

In January, Musk's flagship institution Tesla Motors started accepting Dogecoin, and lone DOGE, for immoderate of its merchandise.

Related: What Elon Musk’s concern could mean for Twitter’s crypto plans

DOGE terms correction risks

Nevertheless, Dogecoin faces interim selloff risks pursuing its awesome gains successful the past 24 hours.

DOGE's terms started correcting little aft re-testing a multi-month downward sloping trendline arsenic resistance.

Interestingly, the enactment constitutes a descending transmission pattern, which raised the anticipation of DOGE extending its pullback determination by different 35%-40% by the extremity of Q2, arsenic illustrated successful the illustration below.

DOGE/USD regular terms illustration featuring 'descending channel' setup. Source: TradingView

The selloff risks toward the channel's little trendline besides stay elevated owed to the 200-day exponential moving mean (200-day EMA) question adjacent $0.16, which has been capping Dogecoin's upside attempts since November 2021. 

DOGE/USD regular terms illustration featuring Fib S/R levels. Source: TradingView

Conversely, a strong upside continuation supra the channel's precocious trendline and the 200-day EMA would presumption DOGE's terms for trial of $0.20 successful Q2. This cardinal level besides coincides with the 0.382 Fib enactment of the Fibonacci retracement graph, drawn from the $0.35-swing precocious to the $0.10-swing low.

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