The ongoing clash between two influential figures—President Donald Trump and SpaceX CEO Elon Musk—is weighing heavily on the cryptocurrency market. While the discord seems to have somewhat subsided, it remains a significant topic, with fewer conflicts this week compared to last week. The impact of their conflict has spread throughout the cryptocurrency space, even reaching its more speculative corners. In particular, meme coins are feeling the pressure. Dogecoin (DOGE), a prominent coin in that category, has dropped nearly 2% in the past 24 hours and more than 5% in the past seven days.
Elon Musk's role in the recent rise and fall of Dogecoin.
Musk has long been known as the 'Dogefather' for his support and frequent public mentions of this token. His tweets and public comments often cause DOGE prices to soar, but this time, a surprising statement from Elon Musk had the opposite effect, causing Dogecoin to plummet.
An exciting moment was his appointment as the head of the Department of Government Efficiency (DOGE), which many see as a light acknowledgment of cryptocurrency. That appointment attracted attention and temporarily renewed interest in the token.
However, Musk has now announced the closure of this division, stating that their goal has been achieved. This move, while seemingly symbolic, has dampened the enthusiasm that often supports the speculative value of Dogecoin. Without additional sparks from Musk, the momentum around this token seems to have significantly slowed.
Market volatility reflects a shift in sentiment.
The price of Dogecoin has increased over the past few weeks. But on Thursday, from 16:00 to 20:00 UTC, things changed rapidly. In just a few hours, the price dropped from around $0.19 to about $0.16 — a decrease of more than 15%. This sharp decline triggered a strong sell-off as investors rushed to exit. That rapid drop marked a break below the upward trend line.
Over the weekend, the king of cryptocurrencies attempted a recovery but faced strong resistance near the 100-day Simple Moving Average (SMA). After approaching this level, the price was firmly rejected. This rejection was not solely due to the 100-day SMA but also coincided with a horizontal resistance zone from previous price action. Together, they form a strong supply zone where selling pressure has dominated. If the downtrend continues, lower price levels may still be ahead.
Meanwhile, the Relative Strength Index (RSI) is currently around 39.49, with the signal line near 42.17. This places it in the lower range of the chart, reinforcing the current downtrend. Although there has been a slight recovery in the RSI—indicating a brief pause in selling pressure—the overall trend remains negative. The RSI still remains below both the signal line and the neutral level of 50, indicating that buyers have yet to regain control. Until the RSI crosses above 50 and the price breaks through key resistance levels, the overall outlook for Dogecoin remains bearish.
Dogecoin is at a crossroads amidst increasing bearish signals.
DOGE is currently trading around $0.18 at the time of writing. For buyers to regain control, the price must break above the 100-day SMA, the trend line, and ultimately the 50-day SMA. If this does not happen, Dogecoin may continue its downward trend for a while.
Beyond technical indicators, market sentiment also plays a crucial role in the direction of DOGE's price. To shift momentum back in their favor, buyers may need a significant change in the cryptocurrency space or the political environment. The ongoing clash between Trump and Musk only adds to the uncertainty, dragging down the overall market confidence. A solution could ease tensions, while a broader increase in the cryptocurrency market could help reverse current sentiment. Until then, any bullish moves may only last a short time.