Dec. 20 saw the price of Dogecoin (DOGE) surged by almost 25% in that Tesla CEO Elon Musk once again mentioned the meme-inspired cryptocurrency, which gained attention from the public.
Musk has developed a habit of tweeting about Bitcoin (BTC) and the crypto market every once in a while. The market react to it quite aggressively as long as he tweets.
Musk last tweeted about Dogecoin in July 2020, when he said he foresees a "Dogecoin standard future." DOGE increased 14% following his words.
It is quite simple about the reason behind DOGE's surge when Musk tweets. As cryptocurrency researcher Hasu expounds, "prices in this space are fueled by attention." As such, a low market cap cryptocurrency can increase swiftly when more people pay attention to the crypto.Dogecoin 1-hour price chart (Binance). Source: TradingView.com
Musk tweeted "One word: Doge," which caused a frenzy on Twitter. Dogecoin begun to trend on the platform, particularly when Musk changed his bio to "Former CEO of Dogecoin."
Dogecoin reaches roughly $549 million in market cap, as per date from CoinMarketCap. Different from major cryptocurrencies such as Bitcoin, Ether (ETH) and top decentralized finance (DeFi) tokens, DOGE's valuation is considerably lower.
The meanings behind DOGE's increase
The surge of DOGE led to the beginning of altcoin cycles in the past, technical analysts and traders note. "Crypto Capo" - a pseudonymous trader - stated: "Every altseason starts with $DOGE pumping."
The probability of an altcoin season emerging maintains high in that Bitcoin faces a major resistance at $25,000, according to exchange orderbook date.
Meanwhile, the trader stated that it's possible for Bitcoin to hit $25,000 first, drop to $21,000 to reclaim support and make its run towards $30,000. According to the trader, "Potential roadmap for $BTC -$25k, then $21k-22k, then $30k Dips are for buying."
All these factors combined indicate that the surge of DOGE could mark the beginning of a new altcoin cycle in the near future.