- Dogecoin’s price dropped 20% in a month raising doubts about its ability to maintain a bullish trend.
- Elon Musk said the US government has no plans to use Dogecoin, which caused concern among crypto investors.
- Long-term holders continue to buy Dogecoin, showing confidence while traders watch key support and resistance levels.
Dogecoin has seen a 20% decline in price over the past month, raising doubts about its ability to sustain a bullish trend. This drop has sparked concerns among investors, who are now questioning whether the cryptocurrency can regain momentum. With its value slipping, the market remains uncertain about the future direction of DOGE.
Elon Musk’s Influence Faces New Scrutiny
The recent comments made by Elon Musk contributed to further confusion regarding Dogecoin. The cryptocurrency’s historical price changes have often correlated with his public statements. However, investors are now questioning whether his support alone can sustain DOGE’s momentum. Market reactions indicate skepticism about the long-term impact of his statements.
Musk Clarifies Government’s Stance on Dogecoin
Elon Musk clarified that the US government has no plans to use Dogecoin, addressing speculation that links the popular crypto asset to the Department of Government Efficiency (DOGE) project he is currently leading. Musk revealed he initially planned to name the initiative the “Government Efficiency Commission” but changed it to “Department of Government Efficiency” following public input.
Musk has set a target of achieving 15% operational improvement for governments through this project. The government efficiency initiative emerged as an initiative from President Trump to reduce federal spending while improving operational efficiency. Speculation about crypto initiatives rose after Musk’s involvement but the main priority of DOGE remains focused on government efficiency instead of crypto adoption.
The department’s playful name creates confusion because it matches Musk’s well-known involvement with Dogecoin as a meme cryptocurrency. The Tesla CEO has continuously shown his support for Dogecoin through social media messages and formal announcements. He previously defended Dogecoin’s inflationary model by calling it a feature that supports its usability for everyday transactions.
Network Valuation and Trading Behavior
Dogecoin’s Network Value to Transaction (NVT) ratio currently stands at its highest level during the past three months thus indicating inconsistent values between transactions and network worth. High NVT ratios indicate market overvaluation which tends to encourage more price drops in the near future. Traders are monitoring this metric closely to gauge market sentiment and potential future trends.
Long-Term Holders Maintain Confidence
Despite the recent downturn, long-term investors continue accumulating Dogecoin. The HODLer Net Position Change remains positive, indicating strong belief in the cryptocurrency’s resilience. Their continued support could help stabilize prices, preventing sharper declines in the near term.
The trading price of Dogecoin currently stands at $0.163 but faces resistance as it approaches the vital support threshold at $0.164. A failure to recover at this support level may result in sustained price drops toward $0.147. A renewed bullish trend requires dogecoin to surpass its major resistance point at $0.198.
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