On July 5, Musk dropped a political bomb on platform X - announcing the establishment of the 'American Party', vowing to end the two-party monopoly. This marks a complete break with Trump, as the world’s richest man, who once spent $290 million to support his campaign, now transforms into the Republican 'grave digger' due to the (Big and Beautiful Act).
On both sides of the political betting scale, Musk bets his last chips, and the shadows of power strangulation quietly emerge on the DOGE candlestick chart.
1. Power strangulation: Three deadlocks for DOGE as a political hostage.
1. Dual consumption of Musk's political capital.
Regulatory pressure rises: Treasury Secretary Sbeisent publicly warns Musk to 'focus on business operations', and a rare bipartisan encirclement forms. The entertainment aspect of DOGE’s pun has completely faded, becoming a victim of policy games.
2. Accelerated liquidity siphoning effect.
Once the 'American Party' campaign machine starts, Musk will need to invest $100 million monthly to maintain operations. If sustained for a year, his wealth ranking will drop from 3rd globally to 205th. Trillions in capital will be forced to exit the crypto battlefield, and DOGE will lose its strongest bullish engine.
2. Counterattack: Three breakout signals hidden in DOGE's technicals.
Despite the political clouds looming, on-chain data reveals hidden vitality:
Massive short positions liquidated: Over $11.6 million in short positions in the DOGE futures market were forcibly closed in the past 24 hours, with 85% of losses coming from short sellers. Major funds are forced to cover, creating short-term short squeeze momentum.
Key technical breakthrough: DOGE successfully stands above the 200-day moving average at $0.1822, forming a classic descending wedge reversal pattern. If it can stabilize at this position, the next target will aim for the 100-day moving average at $0.21.
Independent upward momentum begins to show: After Musk announced a reduction in interactions with the 'Department of Government Efficiency', token prices increased by 12%, indicating market expectations for a valuation recovery free from celebrity dependency.
3. Endgame extrapolation: Three fates for DOGE.
Optimistic scenario probability 20%: Musk quickly builds a 50-state campaign network, U.S. party approval ratings exceed 15%, DOGE payment integrated into party donation systems - hitting $0.40.
Neutral scenario probability 50%: Political entanglement continues until the 2026 midterm elections, with DOGE fluctuating between $0.16 and $0.25, waiting for a technical breakthrough.
Pessimistic scenario probability 30%: Trump issues an executive order to cancel the SpaceX contract, Tesla faces SEC investigation - DOGE falls to the abyss of $0.12.
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