Memecoin Dogecoin (DOGE) took a sharp hit today (Monday), dropping 13% and 21% in the daily and weekly charts, respectively. The bearish sentiment comes as broader market volatility weighs on the cryptocurrency sector.
The top three cryptocurrencies, Bitcoin, Ethereum, and XRP, have posted a 3%, 15%, and 13% decline, respectively, in the daily chart. Interestingly, DOGE's technical price analysis shows a bearish momentum, although the price could rebound before any further downtrend.
Bearish Market Sentiment
According to TradingView, the memecoin currently trades below key important price levels, $0.4039 and $0.3157. Although the price is below the 50 and 200 moving averages, DOGE is currently oversold, with a Relative Strength Index of 28.
Depending on market sentiment, DOGE could test lower price levels if the current price level does not hold. The next support levels are $0.2165 and $0.1759. Dogecoin's price woes coincide with a broader crypto market downturn triggered by macroeconomic concerns following Donald Trump's new tariff policies.
The market shed over 6% in capitalization as traders reacted to the latest developments. Meme coins, which often experience heightened volatility, have been among the hardest hit, with Dogecoin now leading the losses.
Adding to the bearish outlook, large DOGE holders offloaded approximately 270 million tokens within a 24-hour period, according to renowned popular crypto market analyst Ali Martinez.
Whales sold 270 million #Dogecoin $DOGE in the last 24 hours! pic.twitter.com/UZfpjUGXDe
— Ali (@ali_charts) February 2, 2025
Elon Musk's Influence
Dogecoin has long been associated with Elon Musk, whose social media activity has frequently influenced its price. His growing role in the Trump administration adds another layer of political uncertainty, particularly as Musk's team has recently gained access to the Treasury's payment system.
The Department of Government Efficiency, an initiative spearheaded by Musk under Trump's directive, was granted access to the federal payment system, the New York Times Reported. Treasury is the most significant target due to its control over payments, raising concerns about potential misuse of sensitive financial information.
While the Treasury Department insists that no payments have been blocked, the broader impact on financial markets remains to be seen. While Dogecoin's recent drop has shaken investor confidence, the next moves will likely depend on broader market conditions and whether buying pressure returns.
If whales continue selling and technical indicators remain bearish, the meme coin could face further downside. However, historical patterns suggest that DOGE has a tendency to rebound after sharp corrections, leaving room for potential recovery.
This article was written by Jared Kirui at www.financemagnates.com.
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