Will Elon Musk’s breakup with Trump fuel Dogecoin’s drop below $0.10?

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Key takeaways:

  • Dogecoin dropped about 7% on June 6 as the public spat between President Trump and Elon Musk escalated.

  • DOGE/USD bear flag hints at a potential 66% drop.

Dogecoin’s (DOGE) price flipped bearish on June 5 after a public feud broke out between US President Donald Trump and its most celebrated backer, Elon Musk. DOGE price is down 7% over the last 24 hours to $0.17, with a classic bearish pattern projecting further losses to $0.06.

Musk’s breakup with Trump bad for Dogecoin

Data from Cointelegraph Markets Pro and TradingView shows Dogecoin trading in a third consecutive bearish session on the weekly candle chart.

The price is down 14% in seven days, extending the three-week-long slide to 28%, as billionaire Elon Musk escalated his public spat with President Donald Trump. 

The fallout that has been sparring in recent days after Musk’s official departure from the Department of Government Efficiency (DOGE) escalated on June 5 with Trump threatening to terminate Musk’s government subsidies and contracts, potentially saving “Billions and Billions of dollars.”

Musk responded on X, claiming Trump would have lost the 2024 US Presidential Election without his support. He called Trump’s recent spending bill the “Big Ugly Bill” and backed calls for his impeachment. 

Musk, a vocal Dogecoin supporter, has historically influenced its price through endorsements, such as tweets or Tesla’s partial acceptance of DOGE for payments. Dogecoin jumped more than 25% in a single day in 2022 after Tesla began accepting DOGE as payment for selected merchandise. 

Related: Bitcoin ETFs bleed on Trump-Musk fallout as sentiment turns to fear

In 2023, DOGE price spiked more than 30% within 24 hours after Musk replaced the blue bird logo on the Twitter (now X) website with an image of a shiba inu, the memecoin’s logo. 

Dogecoin again soared alongside other cryptocurrencies after Trump’s election victory in November 2024, following a campaign that Musk and the crypto industry heavily backed. 

The escalating conflict has led to a broader market sell-off. Investors are now afraid that reduced backing from Musk could dampen crypto sentiment and DOGE’s speculative appeal, pushing its price down.

DOGE’s bear flag targets below $0.1

DOGE has confirmed a bear flag pattern on the weekly chart after dropping below the lower boundary of the flag at $0.20. 

Dogecoin’s price is currently testing the support level at $0.15, aligning with the 100-weekly simple moving average (SMA).

Key support levels to watch on the downside are the 200-day SMA at $0.14 and the April 7 low at $0.13. A high volume move below these support levels could accelerate the sell-off toward the technical target of the prevailing chart pattern at $0.06, or a 66% decline from the current level.

DOGE/USD weekly chart. Source: Cointelegraph/TradingView

The relative strength index (RSI) is below the midline and has dropped from 52 to 43 over the last three weeks, indicating an increasing bearish momentum. The RSI’s value of 43 suggests that there is more room for the downside before oversold conditions set in again.

As Cointelegraph reported, a sharp downturn from the 20-day EMA ($0.20), which aligns with the flag’s lower trendline as shown in the chart above, could increase the risk of a deeper correction to $0.14 or lower.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.