Dogecoin Faces a Potential 60% Drop as Death Cross Pattern Looms
Dogecoin’s price has faced a significant downturn in recent months, and technical indicators suggest that this bearish trend could persist. The emergence of the rare death cross pattern raises concerns about a potential 60% plunge, which could push the popular meme coin to new lows.
Dogecoin’s Steady Decline
Dogecoin (DOGE) dropped to $0.019 on Sunday, marking its lowest level since November 7 of last year. This represents a sharp 60% decline from its November peak, mirroring the downward trajectory of other meme coins such as Shiba Inu, Pepe, and Dogwifhat, all of which have suffered losses exceeding 50% over the past few months.
The decline in Dogecoin’s value is partly linked to broader market sentiment and the waning influence of Elon Musk, a key proponent of the coin. Musk, who has been a significant driver of DOGE’s price action through his public endorsements, has experienced financial challenges this year. According to Bloomberg, his net worth has plummeted by $103 billion, settling at $330 billion.
Political and Market Pressures Weigh on DOGE
Beyond Musk’s financial struggles, political tensions could also impact Dogecoin’s future. Reports indicate that former U.S. President Donald Trump has begun pushing back against Musk’s influence in government. A New York Times article highlighted a tense cabinet meeting where Musk clashed with officials, including Marco Rubio. These tensions have fueled speculation that Musk could exit his role in the Department of Government Efficiency (DOGE), a scenario with potential psychological repercussions for Dogecoin investors.
Market data from Kalshi now suggests a 54% probability that Musk will leave his position before July 2026. Given Musk’s historical role in fueling DOGE rallies, his potential departure could further dampen investor sentiment and exacerbate selling pressure.
Technical Indicators Signal Further Declines
From a technical perspective, Dogecoin’s daily chart paints a grim picture. The price is on the verge of forming a death cross pattern—a bearish signal that occurs when the 50-day Exponential Moving Average (EMA) crosses below the 200-day EMA. The last time DOGE experienced this pattern, in July 2024, the coin’s value dropped by 40% in the following weeks.
Additionally, Dogecoin has broken below the critical 61.8% Fibonacci retracement level at $0.2360, indicating that bearish momentum remains strong. Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) continue to decline, suggesting sustained selling pressure. If the coin fails to hold above the 78.6% retracement level at $0.1680, it could trigger a steeper drop to $0.080—approximately 60% lower than its current valuation.
The Road Ahead for Dogecoin
While Dogecoin has historically defied expectations with sudden surges, current market conditions appear less favorable. Investors are closely watching macroeconomic factors, regulatory developments, and Musk’s evolving role in both the financial and political landscapes. If the bearish technical patterns hold true, DOGE could be in for a rough ride, with a 60% crash not out of the question.
For now, traders should proceed with caution, as Dogecoin’s fate hinges on both market sentiment and external influences that continue to shape its trajectory.