Dogecoin experienced a decline of nearly 10% over the last week as cryptocurrency traders process a recent statement from Elon Musk. The CEO of Tesla clarified that there are no intentions from the US government concerning DOGE. Currently, trader sentiment around Dogecoin stands at 69 out of 100. Despite the fading buzz surrounding the meme coin, DOGE’s price might bounce back in the near term.
Dogecoin not included in US plans, disappointing traders
Traders of Dogecoin (DOGE) were taken aback by Elon Musk’s declaration that the United States government has no plans for DOGE. When Musk mentioned his leadership of the Department of Government Efficiency, it sparked optimism among DOGE holders.
There were discussions about the possibility of DOGE being adopted or incorporated in the department’s future plans.
Known for his affection for Dogecoin, Musk has previously encountered legal issues related to endorsing the token and making statements that influence DOGE’s price. However, his latest comments indicate that the meme coin will not play a role in federal government initiatives.
During a town hall meeting in Wisconsin, Musk stated, “As far as I know, there are no plans for the government to utilize Dogecoin for any purpose… While the names might sound alike, they serve two very different functions.”
Musk further clarified that the name similarities between the acronym and the department do not imply any connection to Dogecoin’s involvement in governmental transactions.
Traders had hoped for DOGE’s acceptance as payment, especially when the DOGE website momentarily showcased the Dogecoin logo featuring a Shiba Inu named Kabosu. While Musk has previously discussed the potential for blockchain technology across various US government sectors, its practical application remains uncertain.
DOGE derivatives traders optimistic about Dogecoin
On Binance and OKX, Dogecoin derivatives traders are wagering on an uptick in DOGE’s price, with a long/short ratio, a critical indicator, currently at 3. The activity in derivatives trading is typically indicative of the asset’s price movements in the spot market.
In the past 24 hours, options volume has surged by 181.45%, though options open interest saw no notable growth.
Forecast for Dogecoin’s price
The daily price chart for Dogecoin suggests potential for further increases. DOGE could rise by 35% and challenge resistance at $0.24040, the upper limit of a Fair Value Gap on the DOGE/USDT daily chart.
The lower limit of this FVG at $0.21465 serves as a barrier to reaching $0.24040. A movement towards this point would result in over 20% gains.
Two critical technical indicators, the RSI and MACD, support a bullish outlook for the meme coin. The RSI currently registers at 46 and is on an upward trajectory. Meanwhile, the MACD shows green histogram bars at the neutral line, indicating positive momentum in DOGE’s price trend.
Should Dogecoin struggle to maintain demand, it could decline back to its low from March 11, testing support at $0.14280. A sharp downturn in Bitcoin (BTC) could trigger a significant correction across cryptocurrency prices, potentially leading Dogecoin to revisit its March 11 low.
Dogecoin trader sentiment and predictions
The excitement surrounding Dogecoin has taken a dip as Musk confirmed there are no future plans for its use in the federal government or within the DOGE department. Although sentiment among Dogecoin traders is still above the 30-day moving average, it might decline if there’s a broad market correction.
Data from Santiment regarding Dogecoin’s supply distribution reveal that traders holding between 1 million and 10 million DOGE tokens added 220 million tokens to their holdings in March. If larger holders continue to increase their positions, this could act as a catalyst, bolstering a bullish outlook for the meme coin.
With the Dogefather absent, will DOGE bounce back?
Musk earned a following in the crypto realm as the “Dogefather.” With the Tesla CEO distancing himself and his Department of Government Efficiency from DOGE, it remains uncertain whether the meme coin can keep its significance.
DOGE is established as a premier meme coin, boasting the largest market cap in its category. With a market capitalization surpassing $26 billion, Dogecoin may maintain its importance and continue to find practical uses if traders adapt to these developments while keeping demand alive across exchanges.
Positive news regarding the Dogecoin ETF and its advancements could also contribute to DOGE’s gains.
Disclosure: This article does not constitute investment advice. The content and materials presented here are for educational purposes solely.