This week, Dogecoin was hit hard due to escalating tensions between Elon Musk and U.S. President Donald Trump. Prices plummeted significantly, with red numbers dominating the market.
Those who have been hyping up the trading frenzy ultimately found themselves as losers. This week, politics and memes intertwined in unexpected ways, marking a week that many will remember.
The conflict between Musk and Trump
According to public posts, Elon Musk officially left the Department of Government Efficiency (DOGE) on Thursday. Prior to that, he criticized Trump's spending bill.
Musk responded by saying that Trump would not have won the election without his support. Subsequently, Trump called Musk 'crazy' and threatened to cancel contracts with Tesla and SpaceX. Musk retorted, 'Come on, make me happy.' He even warned that he might retire SpaceX's Dragon spacecraft.
Musk mentions Epstein documents
According to posts on X, Musk also stated that the reason the documents related to the Jeffrey Epstein case are kept confidential is because Trump's name appears in them. This claim further escalated the dispute between the two sides.
This is no longer just a matter of spending money. Another accusation links the U.S. President to the investigation of the Epstein case. Trump responded by saying he would terminate all contracts with Musk's companies.
Dogecoin price plummets
Reportedly, on Thursday alone, Dogecoin fell by about 11%. Over the past week, the coin's price has dropped 16% from recent highs. Traders point out that Musk's political exit is a key factor.
Due to Musk's early support, many still view Dogecoin as 'the people's cryptocurrency.' However, with the loss of his support in government, market sentiment has rapidly deteriorated.
Bitcoin is a currency without actual asset backing, so any shift in hype can lead to a price crash. Such a magnitude of decline is uncommon, but once the conflict between Musk and Trump gained public attention, such a drop seemed inevitable.
Tesla's stock price declines
Elon Musk's companies were not spared either. Tesla's stock closed down 13% on Thursday. Previously, Trump hinted at canceling any federal contracts with Musk's companies.
Investors are concerned about income losses and increased regulatory pressure. Tesla's stock price has soared this year, but Trump's angry tweets are enough to shake market confidence. Even a brief comment about X can sway the market—especially when it involves polarizing figures like Trump or Musk.
Cryptocurrency market liquidation
Meanwhile, the broader cryptocurrency market has also been impacted. According to Coinglass data, the total daily liquidation amount reached $982 million. Among them, long liquidations (betting on price increases) totaled $881 million.
Short positions (bets expecting a price decline) lost $100 million. Such a large-scale liquidation is shocking and indicates that emotions can quickly tense when big figures clash. Bitcoin and many altcoins fell alongside Dogecoin, triggering a chain reaction of forced selling.
Factors driving the next move of Dogecoin
In the short term, sentiment headlines may be as important as candlestick charts.
A public reconciliation between Musk and Trump, or even a new supportive tweet worth imitating, could reignite retail interest and push DOGE's price up to $0.1850, thus opening the path to $0.20 and the clustering of the 20 to 100-day EMA.
Conversely, if the dispute escalates, new regulatory trends emerge, or broader risk-averse measures in the cryptocurrency market occur, sellers may test the patience of dip buyers again. Currently, Dogecoin is on the edge of danger: the fundamentals tilt bearish, while momentum oscillators suggest a potential recovery.
Short-term traders can take a scalp long position, targeting a price level of $0.1850, but given the current market volatility, it is crucial to set a tight stop loss below $0.1700. Swing traders may wait for a daily closing price above $0.20 to confirm a trend reversal, or only consider adding positions when the Dogecoin price rushes to $0.1576, as the risk-reward ratio would significantly improve at that point.