Will Dogecoin Reach $1 Soon? Price Jumps 7% as Traders Weigh US Tariff, Fed Policy Shifts

The cryptocurrency market experienced a brief rally today (Tuesday), with Dogecoin (DOGE) jumping 7% as traders reacted to potential changes in US trade policy.

Speculation that upcoming tariffs may be milder than initially expected, combined with the Federal Reserve's plan for rate cuts in 2025 could be behind the renewed optimism.

This shift has also boosted memecoins like PEPE and FLOKI, while Bitcoin and XRP experienced modest gains. $PEPE experienced a 3% jump in the past day. Bitcoin and Ethereum are trading at $87k (representing a 7% boost in the past week), while Ethereum has gained nearly 10% in the same period to trade at $2,058.

Crypto Markets React to Trade War and Fed Policies

Investor sentiment improved following reports that President Donald Trump's proposed “reciprocal tariffs,” set to take effect on April 2, may be more targeted than feared. Reports about Trump Media collaborating with Crypto.com for ETFs have also boosted the market.

Some countries might be exempt, and existing metal levies may not be compounded. Last week, the Federal Reserve raised inflation forecasts but reaffirmed its plan for two rate cuts in 2025, reinforcing confidence in risk assets.

This dual narrative of potential tariff relief and continued monetary support has sparked a bullish response, particularly in speculative crypto sectors.

DOGE and other memecoins have outpaced Bitcoin, Solana's SOL, and XRP over the past 24 hours, with the meme sector alone up nearly 6% on average, according to CoinGecko data. These assets often move in sync with broader crypto trends but offer traders amplified returns due to their speculative nature. Retail investors tend to treat rallies in major cryptocurrencies as signals to enter riskier trades.

The Macroeconomic Factor

Beyond macroeconomic factors, Dogecoin's rally may have been influenced by internal developments within its ecosystem. The House of Doge recently signed a five-year agreement with the Dogecoin Foundation to promote DOGE as a decentralized currency for everyday transactions.

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The initiative also established “The Official Dogecoin Reserve,” purchasing 10 million DOGE to bolster its credibility. Although this acquisition is relatively small in USD terms, it reinforces Dogecoin's position as the leading memecoin.

Despite its recent rally, DOGE remains well below its post-election peak of nearly $0.50, having lost over 60% of its value since then. However, with improving sentiment in risk assets, the memecoin sector could continue to attract speculative interest in the near term.