Dogecoin price bounces 13% as Elon Musk’s X teases P2P payments

Dogecoin price briefly grazed $0.09 on Jan. 12, up 13% since Elon Musk’s X announced plans to launch a P2P payment platform earlier in the week. 

On Jan. 9, Elon Musk’s social media giant X issued a blog post titled “Transforming the Global Town Square” outlining a roadmap for 2024. In addition to deepening artificial intelligence (AI) integration for advertising, X also mentioned plans to launch peer-to-peer payments functionality. This positive reaction triggered a Dogecoin (DOGE) price reaction.  

We will launch peer-to-peer payments, unlocking more user utility and new opportunities for commerce, and showcasing the power of living more of your life in one place.

– X.com, Jan. 9

Elon Musk’s and X’s affinity with Dogecoin has been well documented over the years, with the DOGE logo momentarily added to the website in 2023.

In effect, X’s newly unveiled plans to launch a P2P network have triggered speculation that the social media giant could leverage the Dogecoin network. 

The chart from TradingView depicts that the DOGE price has bounced 13% within days of the blog post. However, on-chain data movements suggest the rally could be short-lived.

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800 million Dogecoin sell orders could truncate price rally 

After the 13% rally that saw Dogecoin reclaim $0.09 territory on Jan 11, DOGE price has retraced below the $0.084 mark at press time on Jan 12. A deeper inquest into the on-chain data trends shows that the dominant sentiment across Dogecoin markets is still bearish, despite the recent price upswing in the aftermath of X’s unveiling official plans to launch peer-to-peer payment. 

IntoTheBlock’s aggregate exchange order books data sums up the value of a specific cryptocurrency’s active buy and sell orders listed across various exchanges. 

The chart below illustrates that currently, DOGE traders have listed orders to sell off 798 million DOGE. On a concerning note, this far outweighs the active buy orders of 752.4 million DOGE. 

When the ‘Sell/Ask’ side of the order books towers higher than the Buy/Bid side, as depicted above, it implies that market momentum is leaning bearish. 

Dogecoin sell orders currently outnumber the buy orders by 48 million DOGE. Intuitively, when the market supply for an asset outpaces demand by such a substantial margin, it puts downward pressure on price. 

The current spot market dynamics point towards an imminent DOGE price correction. 

Losing the $0.07 support could catalyze major losses

DOGE price appears to be at risk of a major price correction, drawing inferences from the exchange order books trend analyzed above. But to validate this outlook, the bears must scale the initial support buy-wall around $0.07. 

IntoTheBlock’s Global In/Out of the Money (GIOM) data groups the current DOGE-funded wallets according to their historical entry prices. It depicts that 568,880 addresses had acquired 46.9 billion DOGE at an average price of $0.072. Notably, this is the largest cluster of current Dogecoin holders below the current prices. 

A move below that $0.72 support level could trigger panic and possibly catalyze larger losses. 

Alternatively, the bullish traders could invalidate this pessimistic forecast if the DOGE price scales to the $0.10 territory. But in this scenario, the $0.095 resistance could mount a major obstacle.