While the broader crypto market saw deep red on Thursday, Dogecoin (DOGE) was on the move.
On Thursday, DOGE rallied by 7.85% to end the day at $0.1758. It was a 3rd consecutive day in the green, with the previous 2 gains coming off the back of FED Chair Powell testimony.
Tesla and Cryptos Continue to Intertwine
Delivering support on the day was news of Tesla testing DOGE as a payment option. According to the latest news, the DOGE payment option was added for testing a few days ago. A software engineer reportedly analyzed source code. There have yet to be any comments from Tesla, however. Nonetheless, it’s not the first time that Elon Musk and Tesla have been in the cryptos news.
Late last year, news had hit the wires of an Elon Musk Tweet stating “Tesla will make some merch buyable with Doge & see how it goes”. Meme coins continue to respond to chatter from Elon Musk, who remains a staunch ally of DOGE and Shiba Inu Coin (SHIB).
More significantly, Tesla had purchased a sizeable Bitcoin (BTC) holding early last year. In February, news had hit the wires of a Bitcoin breakout, driven by Tesla purchasing $1.5bn of Bitcoin. Following the purchase, Tesla also announced accepting Bitcoin for car payments.
Since then, however, Tesla has ceased to accept Bitcoin payments over environmental concerns.
Cryptos, Crypto Mining, and the Environment
Tesla’s decision to withdraw the acceptance of Bitcoin came ahead of China’s decision to ban crypto mining last summer.
Since then, crypto mining has become a hot topic, with the U.S becoming the largest Bitcoin mining nation by hashrates.
According to University of Cambridge, the U.S accounted for 35.4% of the total Bitcoin hashrate as at August 2021. Prior to China’s ban, the U.S had accounted for less than 20%.
Concerns over the impact of cryptos and mining on the environment had led to China’s ban. In the U.S, the marked increase in mining has also caught the attention of the U.S government. Earlier this year, news had hit the wires of a U.S Congress sub-committee preparing a hearing on cryptos, crypto mining, and the impact on the environment.
For the Day Ahead
Whether DOGE can hold onto Thursday’s gains remains to be seen. The news wires and any further chatter from Tesla will likely be key. Negative sentiment across the broader crypto market over FED monetary policy and increased regulatory scrutiny remain downside risks.
A move back through yesterday’s current year high $0.1768 would bring $0.20 levels and December’s high $0.2232 into play. News confirmation of Tesla testing DOGE for payment would be key for a break back through to $0.20 levels.
A fall back to sub-$0.17, however, would bring $0.15 levels and Monday’s current year low $0.1432 back into view.
DOGE sentiment for 2022 is bullish. More bullish price predictions have DOGE hitting $1.00 by mid-2022 and $1.50 within 5-years. DOGE currently sits well below its May 2021 ATH of $0.7398.
At the time of writing, DOGE was down by 0.23% to $0.1754.