On January 12, the price of Dogecoin briefly touched $0.09, marking a 13% increase since Elon Musk’s X announced plans to launch a peer-to-peer (P2P) payment platform earlier in the week. Musk’s social media platform, X, outlined its roadmap for 2024 in a blog post titled “Transforming the Global Town Square” on January 9. The post discussed deepening artificial intelligence integration for advertising and revealed plans for a P2P payments functionality, resulting in a positive reaction in the Dogecoin price.
Elon Musk’s and X’s association with Dogecoin has been well-documented, with the DOGE logo appearing briefly on the X website in 2023. The unveiling of X’s P2P network plans has led to speculation that the social media giant may leverage the Dogecoin network.
Despite the recent 13% rally, on-chain data indicates a potential short-lived nature of the price surge. The analysis of order book data by IntoTheBlock reveals that Dogecoin traders have listed sell orders for 798 million DOGE, significantly outweighing the buy orders of 752.4 million DOGE. When the ‘Sell/Ask’ side surpasses the ‘Buy/Bid’ side, it suggests a bearish market sentiment.
The current dynamics suggest a bearish leaning, with Dogecoin sell orders outnumbering buy orders by 48 million DOGE. This substantial oversupply may exert downward pressure on the price, hinting at a potential correction.
If the bears manage to breach the initial support buy-wall around $0.07, it could trigger a significant price correction. IntoTheBlock’s Global In/Out of the Money (GIOM) data reveals that a move below the $0.072 support level, where a large cluster of Dogecoin holders acquired 46.9 billion DOGE, might lead to panic selling and larger losses.
On the contrary, a bullish scenario could unfold if DOGE manages to scale to the $0.10 territory, though facing resistance at $0.095. The outcome will depend on how market dynamics evolve in the coming days.
