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Dogecoin (DOGE) encountered a tumultuous day on Tuesday, stirred by an unfounded social media rumor suggesting the death of the beloved mascot associated with the popular meme coin.
The false news created a ripple effect, leading to significant fluctuations and capturing the attention of crypto enthusiasts.
Fake News Triggers DOGE Price Surge and Subsequent Correction
The DOGE price witnessed a sudden and notable surge, climbing by 9% and reaching 8.3 cents. The catalyst behind this abrupt movement was a post by a pseudonymous X (formerly Twitter) user known as TraderAguila.
According to CoinDesk, the user posted a screenshot of a Telegram conversation in Japanese, claiming the unfortunate passing of Kabuso, the iconic dog representing the cryptocurrency.
However, the situation swiftly took a turn as the post's author deleted it and shifted their account to private, confessing that the screenshot was indeed a fabrication.
Furthermore, the user went a step further and deleted their entire account. This sequence of events corrected DOGE's price, bringing it back down after the initial surge.
Market Reaction and Impact on DOGE Traders
Despite retracing to around 8 cents, which is still higher than the 7.7 cents before the fake news, DOGE had already shed most of its gains.
The episode stirred reactions among crypto observers, adding to the industry's reputation for alleged market manipulation and speculative tendencies.
Prominent crypto market observer, Tree of Alpha, expressed disdain for the situation, stating, "The charts people are painting while speculating over the death of an animal make me think we're either all going to hell or we're already there."
According to Business Insider, the volatile period unsettled some DOGE traders as the rapid price swing led to the liquidation of over $674,000 worth of leveraged derivatives trades within an hour, surpassing liquidations in other crypto assets, including Bitcoin, according to CoinGlass data.
These events unfolded in the context of Dogecoin's evolution from a humorous cryptocurrency in 2013 to a global phenomenon with a market capitalization exceeding $11 billion.
The incident coincides with heightened attention on the crypto market, awaiting regulatory approval for a sought-after spot Bitcoin exchange-traded fund (ETF) in the U.S., seen as a significant milestone for the industry's maturation.
It's worth noting that false information has previously impacted cryptocurrency markets, as seen in October when a tweet from CoinTelegraph falsely claimed that BlackRock's application had received regulatory approval, briefly spiking Bitcoin prices.
Such instances highlight the importance of caution and verification in the crypto space.
Photo: Kanchanara/Unsplash
