- The price of Dogecoin fell below $0.20 on Thursday, marking a 2.4% drop from its peak within the last 24 hours.
- Trump’s announcement of a 25% tax on auto imports has negatively affected assets connected to Elon Musk, including Tesla and Dogecoin.
- More than $200 million in Dogecoin futures contracts were closed by traders, bringing open interest down to below $2 billion.
Dogecoin Drops 4% as Trump’s Auto Tariffs Affect Musk-Linked Assets
Over the past two trading days, Dogecoin (DOGE) has seen significant price fluctuations, influenced by mixed messages from U.S. President Donald Trump. Reactions to Trump’s statements have caused DOGE prices to swing in opposite directions, leading to increased market volatility.
Dogecoin price action, March 27
As of now, DOGE is trading below the $0.19 mark, reflecting a 2.4% decline according to market data.
What is Causing Dogecoin’s Price Decline Today?
On Monday, Trump reiterated his backing for the official TRUMP meme token, resulting in a rally across the altcoin market. Memecoins such as DOGE, PEPE, and SHIB witnessed increases of over 5%, pushing the entirety of the memecoin sector’s market capitalization past $62 billion by Tuesday.
Tesla (TSLA) stock price performance after Trump’s auto tariffs were confirmed
However, the situation changed on Wednesday after the announcement of a 25% tariff on car imports set to take effect on April 2.
Reports indicate that Elon Musk confirmed this policy could have significant repercussions for Tesla’s financial performance.
This uncertainty led to considerable sell-offs in assets connected to Musk, including Tesla shares, which plunged 5% within a day of the announcement, exhibiting a 6% recovery when markets opened on Thursday. Due to Musk’s well-known associations with the Dogecoin community, the initial rally for DOGE quickly lost momentum, resulting in a substantial 2.4% decline by Thursday.
Trump’s Tariffs Bring New Volatility Risks, DOGE Open Interest Declines below $2 Billion
The 2.4% drop in Dogecoin’s price on Thursday mirrors the bearish sentiment surrounding Musk-linked assets as the market assesses the economic implications of Trump’s latest tariffs.
Delving into Dogecoin’s derivatives data reveals increased caution among traders, who are pulling capital from the market amidst growing volatility risks.
Dogecoin derivatives markets analysis, March 27
According to the latest data, Dogecoin’s open interest has dropped by 9.47% to $1.99 billion, even as the price decreased by only 4%.
This discrepancy indicates that traders are unwinding leveraged positions more rapidly than the price is falling, pointing towards a lack of confidence in DOGE’s short-term recovery.
A notable decline in open interest relative to price is usually an indicator of weakening market participation and diminished speculative interest, increasing the chances of further downside.
Additional bearish indicators reinforce this trend. Overall trading volume has decreased by 13.82% to $4.59 billion, reflecting lower trading activity and liquidity.
Furthermore, the 24-hour long/short ratio sits at 0.9673, suggesting that short sellers are gaining momentum, putting more pressure on prices.
Liquidation data also highlights weak bullish sentiment—over the past 12 hours, long traders faced $1.3 million in liquidations, while shorts saw a loss of only $739,620, illustrating that long positions are being closed out at a higher pace.
With diminishing open interest, lower trading volume, and increasing long liquidations, Dogecoin remains susceptible to further declines unless market dynamics improve or new bullish drivers emerge.
Dogecoin Price Outlook: Support at $0.15 Under Threat as Bears Offload Futures
The Dogecoin price outlook is at a critical point as mixed signals emerge from technical indicators. Currently, DOGE has slipped below the crucial support level of $0.20, with sellers regaining traction after a recent upswing.
In terms of future price movements, the Donchian Channel indicates that DOGE is having difficulty maintaining bullish momentum, with the upper band at $0.20585 serving as a significant resistance point.
Dogecoin price outlook chart
A bearish turn could occur if DOGE loses the support at $0.17433, potentially resulting in a swift drop toward $0.15.
While the MACD histogram remains positive, it shows signs of slowing momentum as the signal line nears a bearish crossover.
If selling pressures escalate, DOGE could experience further declines, compounded by futures traders liquidating long positions.
On the contrary, if DOGE closes above $0.20, it may negate the bearish perspective, paving the way for a retest of $0.20585 and possibly an extension toward $0.22.
Nevertheless, the declining trading volume accompanying the downward trend on Thursday indicates rising risks of further declines.