Dogecoin: Dependency on Twitter spurs volatility, investors concerned

• Elon Musk’s decision to remove Dogecoin’s logo caused its value to plummet by 23% in days.
• This sudden reversal in market dynamics has led to many questioning Musk’s intentions and the future of DOGE.

In a twist of events, Elon Musk removed the Twitter dog logo that has become synonymous with Dogecoin [DOGE]. While all good things must come to an end, this particular ending has had a noticeable impact on DOGE’s value, causing concern among investors and enthusiasts alike.

Read Dogecoin’s [DOGE] Price Prediction 2023-24

Away from the dog, back to the bird 

A few days ago, Twitter users awoke to find that Elon Musk had pulled another one of his trademark shocks by changing the blue bird emblem to that of a dog. The community surrounding Dogecoin and similar coins interpreted this as an endorsement, driving prices skyward.

The appearance of the Dogecoin logo on Twitter was just as sudden as its removal, and the reaction from users was equally swift. But while everything seemed to return to the way it was before, there was one notable exception: the price of Dogecoin did not follow suit.

Dogecoin value plummets

The value of DOGE experienced a sudden spike on 3 April, coinciding with the logo change. However, the following days witnessed a shift in market dynamics, with sell pressure gaining prominence, and consequently, the value began plummeting. A glance at the price range tool reveals a drastic 23% drop in value as of this writing. Trading at around $0.8 at press time, the cryptocurrency has incurred a loss of over 3%.

The Relative Strength Index (RSI) line corroborated the sudden drop, signifying a rapid downfall of the bullish trend. As of this writing, the RSI line was on the cusp of breaching the neutral line and could sink further if the price kept falling. While the long and short Moving Averages have been providing support, it remains to be seen how long they could sustain this.

Reversals in other metrics

On 6 April, the 30-day Market Value to Realized Value ratio (MVRV) stood at 2.48%, indicating a healthy valuation of Dogecoin. However, the scenario took a U-turn in just three days, with the MVRV dropping drastically below the zero line to around -0.77%.

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In addition to the price and MVRV, the volume metric also witnessed a stark reversal. Previously, the volume had surged to approximately 170,000, but it has dropped to around 130,000. The drop suggested that the buying pressure had weakened, and sellers had gained control, leading to a decline in demand for Dogecoin.

In another recent turn of events, a group of Dogecoin investors filed a lawsuit against Elon Musk, alleging that he had promoted DOGE as a Ponzi scheme. Elon, on the other hand, has maintained his innocence.