The price of Dogecoin (DOGE) rallied past roughly 25% on Dec. 20 as Tesla CEO Elon Musk once once more drew attention to the meme-inspired cryptocurrency.

Elon Musk and his enthusiasm toward Dogecoin is a long-running meme. Every in one case in a while, Musk likes to tweet about Bitcoin (BTC) and the crypto market. When he does, the market reacts to it quite aggressively.

Musk last tweeted about Dogecoin in July 2020, when he said he foresees a "Dogecoin standard hereafter." At the time, DOGE rallied xiv%.

The reason behind Dogecoin'due south upsurge when Musk tweets is quite simple. Equally cryptocurrency researcher Hasu explains, "prices in this space are fueled by attention." Hence, when at that place is a meaning increase in attention, a depression market place cap cryptocurrency can increase rapidly.

Dogecoin 1-hour cost chart (Binance). Source: TradingView.com

Dogecoin trending on Twitter

On Dec. 20, Musk started to tweet about Bitcoin, posting several tweets most the dominant cryptocurrency.

In the midst of it, Musk tweeted "One give-and-take: Doge," which caused a frenzy on Twitter. Dogecoin started to trend on the platform, especially as Musk changed his bio to "Former CEO of Dogecoin."

According to data from CoinMarketCap, Dogecoin has a market capitalization of around $549 million. Compared to major cryptocurrencies, like Bitcoin, Ether (ETH) and elevation decentralized finance (DeFi) tokens, DOGE's valuation is essentially lower.

Moreover, because DOGE is only the 44th largest cryptocurrency in the globe, its volume and liquidity are lower than the top cryptocurrencies.

As such, when an influential figure, like Musk, talks most DOGE, the cryptocurrency oftentimes surges as the trading action suddenly rises.

In Nov, other major altcoins saw a similar trend. For instance, as Cointelegraph reported, XRP surged massively as Bitcoin began to rally towards $xix,000. On Coinbase, it surpassed $0.ninety while hitting around $0.75 on other major exchanges.

What does DOGE's surge bespeak?

Technical analysts and traders pinpoint that the upsurge of DOGE led to the starting time of altcoin cycles in the by. A pseudonymous trader known as "Crypto Capo" said:

"Every altseason starts with $DOGE pumping."

The probability of an altcoin flavour emerging remains high considering Bitcoin faces a major resistance at $25,000 based on commutation orderbook data.

The trader likewise noted that Bitcoin would likely striking $25,000 showtime, drop to $21,000 to reclaim support, and make its run towards $30,000. The trader said:

"Potential roadmap for $BTC -$25k, then $21k-22k, then $30k Dips are for buying."

If a scenario similar to this occurs, the largest beneficiary would likely be altcoins. Traders would seek for higher-run a risk plays to offset the declining volatility in the Bitcoin market.

The combination of these factors suggests that the rally of DOGE could marking the starting time of a new altcoin cycle in the foreseeable futurity.