Dogecoin is facing a significant drop in price. In just 24 hours, it has fallen about 12%, landing at $0.338 on January 21. This decline comes as market sentiment is impacted by Donald Trump’s lack of focus on cryptocurrencies during his inauguration.
After Trump took office as the 45th president of the United States, many expected a wave of crypto-friendly policies. Instead, his first executive orders didn’t mention cryptocurrencies at all. This left a lot of people in the industry feeling disappointed.
Matthew Dibb, the chief investment officer at Astronaut Capital, noted that the market had high hopes for Bitcoin and a loosening of regulations. He mentioned that any changes would likely come slowly, not all at once. This uncertainty has led to increased volatility. Even before the inauguration, Dogecoin was already on a downward trend, peaking at $0.434 on January 19 and then dropping over 22.50% since then.
Interestingly, around the same time that Dogecoin hit its peak, Trump and Melania Trump launched their own “official” memecoins. Initially, these coins saw a spike in popularity. However, both $TRUMP and $MELANIA coins have also dropped significantly—29% and 60% in the last 24 hours, respectively.
Additionally, Dogecoin's decline is linked to Vivek Ramaswamy stepping down from the Department of Government Efficiency (DOGE), a government initiative he was supposed to lead with Elon Musk. Ramaswamy is now focusing on a potential run for Ohio Governor, leaving Musk as the sole leader.
To complicate matters further, there are reports that a public interest law firm, National Security Counselors, plans to sue DOGE for alleged violations of federal transparency laws. Although Dogecoin isn’t officially tied to the government agency, the shared acronym and Musk's involvement have raised concerns among traders and the Dogecoin community.
Speculation and excitement surrounding Dogecoin surged in 2024 after the department was announced. However, today’s legal and political challenges are weighing heavily on market sentiment.
Looking ahead, Dogecoin is currently in a consolidation phase within a symmetrical triangle pattern. This pattern shows that neither buyers nor sellers are fully committed right now. A breakout from this pattern could lead to significant price changes.
The height of the triangle suggests that if Dogecoin breaks above the upper trendline, it could reach a price target of $0.59. That would mean a potential increase of over 70% by February. On the flip side, if it breaks down, the price could drop to around $0.20, representing a 42% decline from current levels.