A staggering 169 new Dogecoin (CRYPTO: DOGE) contracts were created on the Ethereum (CRYPTO: ETH) and the Binance (CRYPTO: BNB) blockchains amid the popular meme coins stupendous rally, which saw its price increase by about 25% in the last 24 hours and an eye-watering 150% over the previous week, causing thousands of dollars worth of investors’ wealth to be lost.
Musk's Tweet Propelled Tuesday's Rally
Tesla Inc (NASDAQ:TSLA) CEO Elon Musk posted a tweet that appeared to be the catalyst for Tuesday's Dogecoin price increase. The tweet included a Shiba Inu dog wearing a Twitter T-shirt and sitting next to a Halloween pumpkin with Twitter's logo carved into it.
Soon after Musk's tweet, DOGE contracts with names like "LittleHotDoge," "TwDogElon," "BABYBABYDOGE" and "TwitterDoge" began to flood both blockchains.
According to blockchain security company Peckshield, out of the 169 new DOGE contracts, 67 saw a price decline of more than 90%.
In addition, the price of 45 tokens dropped 100%, costing investors a combined loss of hundreds of dollars.
Forty-two of the tokens were labeled as "honeypots" by Peckshield, a term used to denote illicit tokens that modify the permissions on unwary users' crypto wallets seeking to eventually transfer all of their tokens from those wallets into one under the control of the bad actor.
According to data from Coinmarketcap, other significant cryptocurrencies including Bitcoin, Ethereum, Ripple (CRYPTO: XRP) and Cardano (CRYPTO: ADA) were up 7%, 20%, 3% and 16%, respectively.
Meanwhile, according to pseudonymous cryptocurrency analyst SmartContracter, the Dogecoin/Bitcoin chart was the "most crazy bullish thing" he had seen in a while, and he was thinking about switching his money from Bitcoin to Dogecoin for the next few months at least.
Tweeting to his 215,000 followers, the analyst stated that the chart appears bullish because of an inverted head and shoulders pattern that has been visible for a year and that "barely anyone is even talking about.”
Notably, a head and shoulders pattern on a chart indicates a shift from a bullish to a negative trend. Meanwhile, an inverted head and shoulders pattern suggests a shift from a bearish to a bullish trend.
Musk's interest in Doge
Musk has previously tweeted about Dogecoin and shared its memes on a number of occasions, showing his support for the meme coin.
The Boring Company, Tesla, SpaceX and all of Musk's other companies accept Dogecoin as payment for items. The name of SpaceX's 2022 moon mission is also called DOGE-1.
Musk’s tweets and endorsements are known to pump up prices of the meme coin frequently.
Next: Why Dogecoin (DOGE) Is Popping Off Again
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