Elon Musk‘s X, previously known as Twitter, has set up a dedicated account for a new payments feature called @xpayments, sparking speculation in the crypto community about whether it might cater to cryptocurrencies.
Over the weekend, Dogecoin (DOGE) spiked by 16% and Floki (FLOKI) experienced a 26% surge in its prices. DOGE often reacts positively to news related to its adoption for payments in Musk’s ventures, such as electric car manufacturer Tesla. FLOKI, named after Musk’s pet, has also gained traction among certain investors.
Did pure speculative mania drive these meme coin spikes, or is there anything sustainable underneath?
DOGE reached a high of $0.10 on December 10, from a low of $0.057 on October 12, increasing by 86%. At that point it hit a resistance level, sending the price down.
After that, the price fell by nearly 30%, reaching a low of $0.076 on January 8. There have been some positive signs since, with a larger 20% spike on Saturday, January 20. The spike came after a bounce from the 0.618 Fibonacci retracement level. This could have indicated the end of the previous downfall.
However, DOGE went back to the $0.076 level it started from, cancelling out all its gains. There is still a chance that a new uptrend is commencing but, because the price is near the previous low, it needs to hold above it.
If it does and increases again, we could see a new larger uptrend, leading DOGE to a breakout above $0.10 resistance and further beyond for another higher high.
Similarly, FLOKI recovered from its $0.000015 low on September 24 and peaked at $0.000047 on December 5, increasing by 220%. A downtrend followed, with the price returning to its 0.618 Fibonacci retracement level of $0.000027.
On Wednesday, January 24, FLOKI fell slightly below its Saturday low, reducing the possibility of an uptrend starting. However, this is still possible, with the previous uptrend showing impulsiveness while the current downtrend appears corrective.
As with DOGE, the 0.618 Fibonacci level needs to hold before we can expect FLOKI to go back up. It is worth noting that nothing besides the previous wave structure implies the potential starting uptrend.
Although Saturday’s high was slightly higher than the previous one, the next low wasn’t, indicating FLOKI is starting to trend upwards. This is why we need to see what happens at the 0.618 Fibonacci level first. It all depends on whether or not the price bounces once more or, instead, it breaks the line.
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