Dogecoin and Elon Musk have had a long relationship. It seems Dogecoin’s price is directly proportional to Musk’s bullish tweet about the meme coin. Not to forget that the billionaire’s tweets of late have been failing to produce a strong impact on Dogecoin.

Well, continuing his streak of manipulating Dogecoin’s price either voluntarily or involuntarily, Elon Musk triggered a sharp rise in the meme coin on 28 May. 

Dogecoin X SpaceX

The ‘DOGEfather,’ in a tweet on 27 May, announced that in the future, SpaceX will be accepting Dogecoin as a means of payment for its merchandise.

Tesla merch can be bought with Doge, soon SpaceX merch too

— Elon Musk (@elonmusk) May 27, 2022

Initiated earlier this year, Tesla ran the offer for people to buy Tesla-related merchandise such as a whistle and even a quad bike designed for children, the cyberquad. 

Now, SpaceX is set to deploy similar features for its users where it could sell accessories and apparel worth anywhere between $15 to $150 in DOGE.

This would skyrocket [pun intended] Dogecoin’s utility beyond its current scope.

As the news broke out, investors reacted positively. With DOGE’s price running up on the charts by 14.74% at its peak in the day.

However, the hype died down soon after, resulting in the altcoin retracing its jump by 10%. Trading at a press time price of $0.0818, the rise didn’t really help DOGE recover the losses observed throughout the week.

Dogecoin price action | Source: TradingView – AMBCrypto

However, this still was not enough to excite the dormant investors who got into DOGE over the period of three months after the market began dipping in February.

Despite not facing a fall in price as worse as many other altcoins, DOGE has noted no significant growth in its holders. After losing out on 600k investors in March, Dogecoin has only recovered 100k of them in two months.

Dogecoin total investors | Source: Intotheblock – AMBCrypto

Moreover, even though the network has almost four million DOGE holders, less than 50k on average are active on-chain. These people make up just about 1.25% of all Dogecoin investors, and that is not a good sign.

Dogecoin active investors | Source: Intotheblock – AMBCrypto

This is because, in spite of their best efforts, these 1.25% investors have not been able to generate any more than $1 billion in transaction volume, which on average used to be close to $7 billion to $10 Billion before February.

Dogecoin transaction volume | Source: Intotheblock – AMBCrypto

Put simply, Dogecoin is now dependent only on the market and a broader recovery since these factors are not contributing much to its growth.