Why is Dogecoin price down today?

Dogecoin (DOGE) is underperforming most of the cryptocurrency market today, having fallen over 4% in the last 24 hours to trade at $0.163.

DOGE/USD daily price chart. Source: Cointelegraph/TradingView

Key takeaways:

• Dogecoin price lost 20% between March 27 and March 31.

• DOGE drops after Elon Musk said the US government has no plans to use Dogecoin.

• DOGE’s recent downturn mirrors the continued panic across the memecoin sector.

• Price chart technicals hint at more losses ahead.

The bearish sentiment was not only exclusive to Dogecoin as most other memecoins recorded significant losses across the board.

Key takeaways:

• Shiba Inu (SHIB), the second largest memecoin by market capitalization, was down 4.2% over the last 24 hours to trade at $0.00001206. 

• Ethereum-based Pepe (PEPE) has dropped by 1.7% over the same period.

24-hour performance of top-cap memecoins: Source: CoinMarketCap

• Solana-based Fartcoin (FARTCOIN) posted the most losses among the top-cap memecoins, dropping by 8% on March 31 to exchange hands at $0.4146.

• The total daily trading volume across the memecoin sector is down by 48% over the last 30 days, indicating the lack of trader interest.

Memecoin market capitalization and weekly trading volume. Source: CoinMarketCap

• The risk-off mode comes amid increasing negative sentiment fueled by macroeconomic uncertainties tied to President Trump’s trade policies.

• This has spooked investors, pushing them away from volatile assets like memecoins.

One of the most significant catalysts for DOGE’s underperformance today is a statement from Elon Musk, a prominent figure whose influence on Dogecoin’s value is well-known.

Related: Elon Musk and crypto: 6 times ‘Dogecoin’s CEO’ rocked markets

What you should know:

• Musk, who leads the Department of Government Efficiency (D.O.G.E.) under the Trump administration, clarified that the US government has “no plans” to integrate Dogecoin into its operations. 

• At a March 30 town hall in Green Bay, Wisconsin, Musk sought to distinguish the federal agency from the leading memecoin despite their shared acronym.

“There are no plans for the government to use Dogecoin or anything as far as I know,” he said. 

• Many had hoped that Musk’s proximity to government policy might lead to official adoption or recognition of the memecoin, especially given his role in a high-profile efficiency initiative. 

• Musk explained that the name originated from suggestions made online. 

• “I was going to call it the Government Efficiency Commission, but that’s a super boring name,” he said.

• Musk’s clarification effectively punctured a narrative that fueled speculative buying, contributing directly to the downward pressure on DOGE’s price.

DOGE has confirmed a bear flag pattern on the daily chart after closing below the lower boundary of the flag at $0.1773. 

Key levels to watch:

• DOGE is currently testing the support level at $0.160 after flipping the flag’s lower trendline into resistance.

• Key support levels include the $0.1427 range low (reached on March 11) and the range low at $0.1275 (reached on Oct. 25, 2024).

• A high volume move below these levels could lead to even more downside.

• The maximum loss target from the pole’s length indicates that DOGE could revisit the $0.0876 zone over the next few days.

• This would represent another 42% descent from the current level.

DOGE/USD daily chart. Source: Cointelegraph/TradingView

• The relative strength index (RSI) has dropped from 52 to 38 since March 26, indicating increasing bearish momentum. 

“Dogecoin exhibits bearish momentum,” said crypto analyst Andrew Griffiths in a March 31 post on X. 

“The price is likely to stabilize below the pivot line at 0.1774, paving the way for potential declines to 0.1478 and 0.1283,” the analyst continued, adding:

DOGE/USD 12-hour chart. Source: Andrew Griffiths

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.