• Dogecoin’s price spiked after Elon Musk’s 25 January tweet.
• Its social mentions and engagements saw a jump due to increased attention.
• Many holders may have the opportunity to sell their holdings for a profit, which could negatively impact Dogecoin in the future.
Dogecoin, a meme-inspired cryptocurrency, saw an unexpected spike in its price soon after Elon Musk tweeted on 25 January. The tweet which mentioned that he would be interested in eating McDonald’s if Dogecoin was accepted as a valid form of payment by the fast food chain, sparked interest and speculation on social media. Notable mentions included the McDonald’s team which further fueled speculation.
The increased attention resulted in a jump in Dogecoin’s social mentions and engagements. According to data from LunarCrush, Doge’s social mentions grew by 4% over the last week, along with a corresponding increase in engagements. The Realistic or not, here’s DOGE’s market cap in BTC’s terms also increased, indicating that many Dogecoin holders may have the opportunity to sell their holdings for a profit. Additionally, the negative long/short difference suggested that these profitable addresses belonged to short-term holders. This could mean that these holders might sell their DOGE holdings for financial gain, which could potentially have a negative impact on the cryptocurrency.
Furthermore, the number of long positions on Dogecoin continued to increase, which indicates traders are still optimistic despite the potential short-term selling pressure. On the morning of 29 January, Dogecoin was trending on Twitter, and its social volume metric had also spiked. All in all, the increased attention on Dogecoin could lead to both positive and negative outcomes for the cryptocurrency. It remains to be seen how the markets react in the long-term.