On February 15, Dogecoin (DOGE) which is the meme token named after Elon Musk’s Shiba Inu, experienced a surge in value, following a tweet by Twitter CEO featuring his dog seated in the CEO chair.
Dogecoin experienced a rally after Elon Musk posted a photo of his Shiba Inu dog, called Floki, on Twitter, accompanied by the caption “The new CEO of Twitter is amazing“.
This tweet led to an increase in the value of both Dogecoin and Shiba Inu, extending their recent gains. As of writing, the global cryptocurrency market cap is up by 2.42%.
The new CEO of Twitter is amazing pic.twitter.com/yBqWFUDIQH
— Elon Musk (@elonmusk) February 15, 2023
After his acquisition deal for Twitter was finalized on October 27, Musk replaced Parag Agrawal as its CEO. Although the two had an amicable relationship when they first met, their relationship reportedly deteriorated over the course of 2022 after Musk became the largest shareholder in the company. Musk has since unfollowed Agrawal on Twitter, while Agrawal continues to follow Musk.
Dogecoin and Shiba Inu Surged
Markets responded to tweets from Tesla CEO Elon Musk, causing a 6% increase in Dogecoin (DOGE) on Wednesday. During today’s session, DOGE/USD hit an intraday high of $0.08707, following a day when it traded at a low of $0.08141. This marks the second consecutive session in which the meme coin has climbed, breaking through a resistance level at $0.0840 in the process.
For the second day in a row, Shiba Inu (SHIB) also experienced a rise, surpassing its own resistance level. After reaching a low of $0.00001222 on Tuesday, SHIB/USD surged to an intraday high of $0.00001313 earlier today. Similar to Dogecoin, today’s surge caused the meme coin to surpass a ceiling at $0.00001285, resulting in a nearly 6% climb.
Given the prevailing bearish market sentiment, early investors may decide to take profits near this level.
Floki Is Up Nearly 50%
CoinGecko data shows that Floki, named after Musk’s Shiba Inu dog, has increased by 41% over the past 24 hours. In January, the price of Floki experienced an increase of nearly 100% after the Floki Inu DAO, the group responsible for the coin, passed a governance resolution to execute a token burn worth $100 million.
The rationale for burning tokens is to reduce the supply, which, if the demand remains constant, can increase the value of each token. This is similar to a stock buyback in the world of cryptocurrencies.
Will Musk’s Tweets Bring a Dog Day?
Dogecoin (DOGE) has experienced surges in the past due to tweets from Elon Musk. In January, the meme coin saw a substantial increase following a report from the Financial Times indicating that Twitter is developing a system to allow cryptocurrency payments.
However, a December 2022 report from blockchain analytics firm Santiment warned that outsized gains in DOGE and other meme coins, such as Shiba Inu (SHIB), have historically been the first sign of a market-wide sell-off.
Despite this, the past three months have seen a market recovery from the depths of the FTX-induced crypto winter, with Bitcoin posting a 34% gain and other altcoins like SHIB, BONK, and Floki seeing gains of 40%, 533%, and 242%, respectively.
Although other dog-themed cryptocurrencies have been performing well, including today’s surge, DOGE has actually decreased by 2%. This indicates that, if Santiment’s thesis is correct, we may not yet be experiencing a market-wide sell-off.