Elon Musk has been instrumental in Dogecoin (DOGE) price surges over the years. However, his recent moves may be having the opposite effect. After President Donald Trump appointed Musk to head the Department of Government Efficiency (DOGE), it diverted attention away from the meme coin itself. With investors fleeing, did Elon Musk kill Dogecoin’s popularity, and can DOGE price recover?
Elon Musk May Have Killed Dogecoin’s Popularity – Can Price Recover?
Musk was one of the catalysts that triggered a Dogecoin price rally in late 2024. At the time, President Donald Trump tapped Musk and Vivek Ramaswamy to head the DOGE department. While this appointment was good for Dogecoin at the time, it gradually drew attention away from the meme coin itself.
Data from Santiment shows that DOGE search volumes peaked on November 12, 2024, coinciding with Musk’s appointment. At the time, the surge in search volumes coincided with a DOGE price increase. However, this trend has since shifted.
While search volumes for DOGE remain somewhat elevated, the DOGE meme coin has not seen the same level of attention. Instead, the price has been on a steep downtrend.
Nevertheless, Musk is not the only reason behind DOGE’s bearish outlook. The recent meme coin mania in Solana launchpad PumpFun diluted the attention away from old coins like Dogecoin and Shiba Inu. As investors chased quick gains with these meme coins, it drained liquidity from the DOGE market, which weakened demand.
Dogecoin Interest Wanes as Investors Flee
The number of daily active addresses further highlights the lack of investor interest in DOGE. This metric has dropped to previous lows after reaching record highs in November. The drop indicates reduced market participation that may lead to sideways price movement or even precede bear markets.
This correlation between Dogecoin price and address count suggests that hype is crucial to the meme coin’s performance. If the market interest remains low as Musk and Solana meme coins continue to divert attention away from DOGE, the price faces more headwinds.
Can Dogecoin Disconnect From Musk’s DOGE and Rally? Let’s Explore
Dogecoin price is under bearish pressure. At press time, DOGE trades at $0.21 with a marginal decline of 0.2% in 24 hours. However, its setup on the daily chart supports a bullish Dogecoin price prediction that could lead to a rally to $1.
DOGE has been trading below its 50-day Simple Moving Average (SMA), a key resistance level that has kept bears in control. After yesterday’s dip, it also fell below the 200-day SMA of $0.24, reinforcing the bearish trend.
However, momentum indicators suggest that Dogecoin price may be on the verge of a reversal. The Relative Strength Index (RSI) is currently at 29, placing DOGE in the oversold territory. This shows possible seller exhaustion that may lead to a short-term relief rally. The Awesome Oscillator histogram bars also show a bullish divergence suggesting selling momentum is slowing down.
If the downtrend is indeed weakening, DOGE price could bounce in the coming days. If it moves back above the 200-day SMA, its key resistance levels are at the 50% and 100% Fibonacci levels of $0.37 and $0.48, respectively.
Additionally, if the meme coin can disconnect from Musk’s DOGE and rally, traders should watch out for long-term price targets at the 161.8% and 261.8% Fib levels of $0.706 and $1.30, respectively.
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