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Dogecoin’s price tumbled 7% amid escalating tensions between Elon Musk and President Trump, signaling potential further declines.
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The cryptocurrency faces technical bearish patterns that could drive its value down by over 60%, raising concerns among investors.
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According to COINOTAG, Musk’s withdrawal of support following his fallout with Trump has significantly impacted Dogecoin’s market sentiment.
Dogecoin drops 7% as Elon Musk and Trump feud intensifies, with bearish signals pointing to a potential 66% price decline amid waning investor confidence.
Elon Musk and Trump Feud Sparks Dogecoin Price Decline
Dogecoin’s recent price action reflects the fallout from a highly publicized dispute between Elon Musk and former President Donald Trump. After Musk’s departure from the Department of Government Efficiency (DOGE) and subsequent clashes with Trump, Dogecoin has experienced a sustained bearish trend. Over the past week, DOGE has declined approximately 14%, extending a multi-week downtrend to nearly 28%. This slump coincides with Musk’s vocal criticism of Trump’s fiscal policies and Trump’s threats to cut Musk’s government contracts, which have historically bolstered Musk’s financial ventures.
The tension between these influential figures has not only affected Dogecoin’s price but also shaken investor confidence in the memecoin’s speculative appeal. Musk’s previous endorsements, including Tesla’s partial acceptance of DOGE and symbolic gestures like replacing Twitter’s logo with Dogecoin imagery, had previously driven significant price rallies. The current discord, however, has reversed this momentum, underscoring the cryptocurrency’s sensitivity to Musk’s public stance.
Market Sentiment and Investor Reactions Amid the Fallout
Market data from Cointelegraph Markets Pro and TradingView reveal that Dogecoin is trading in its third consecutive bearish weekly session. The sell-off reflects growing apprehension among traders regarding the sustainability of Musk’s support and the broader implications for the crypto market. Bitcoin ETFs and other digital assets have also experienced volatility, indicating a shift toward risk aversion triggered by the Musk-Trump conflict.
COINOTAG analysts note that the erosion of Musk’s backing could dampen Dogecoin’s speculative demand, traditionally fueled by social media influence and celebrity endorsements. This shift may prompt investors to reassess their exposure to DOGE, especially as technical indicators begin to signal deeper corrections.
Technical Analysis: Bear Flag Pattern Suggests Further Downside for DOGE
From a technical perspective, Dogecoin’s price chart exhibits a classic bear flag pattern, which often precedes significant downward moves. After breaking below the flag’s lower boundary at $0.20, DOGE is currently testing critical support near $0.15, coinciding with the 100-week simple moving average (SMA). Failure to hold this level could expose the cryptocurrency to further declines toward the 200-day SMA at $0.14 and the April low of $0.13.
The prevailing chart pattern projects a potential drop to approximately $0.06, representing a 66% decrease from current levels. This target aligns with the technical implications of the bear flag and is supported by momentum indicators. The relative strength index (RSI) has fallen from 52 to 43 over the past three weeks, signaling increasing bearish momentum without yet reaching oversold territory, which suggests additional downside risk remains.
Implications of Moving Averages and Momentum Indicators on Price Action
Key moving averages are playing a pivotal role in shaping Dogecoin’s near-term trajectory. The 20-day exponential moving average (EMA), currently near $0.20, serves as a resistance level aligned with the bear flag’s lower trendline. A decisive break below this EMA could accelerate selling pressure, increasing the likelihood of a deeper correction below $0.14.
Technical analysts emphasize the importance of monitoring volume trends alongside these indicators. A high-volume breakdown beneath support levels would confirm bearish sentiment and potentially trigger stop-loss orders, compounding the downward move. Conversely, a rebound above the 20-day EMA could stabilize prices, but given the current market dynamics, this scenario appears less probable in the immediate term.
Conclusion
Dogecoin’s recent price decline is intricately linked to the escalating public feud between Elon Musk and Donald Trump, highlighting the cryptocurrency’s vulnerability to external political and social influences. The emergence of a bear flag pattern and weakening momentum indicators suggest that DOGE may face further significant losses, potentially dropping to $0.06 if key support levels fail. Investors should remain cautious and closely monitor technical signals and market sentiment as the situation evolves. Maintaining a disciplined risk management approach is advisable given the heightened volatility and uncertainty surrounding Dogecoin’s outlook.
