Trump vs. Musk Feud Triggers DOGE Dump: 66% Crash Incoming?

Musk's historical endorsements played a pivotal role in Dogecoin's rise, but his diminished support is currently contributing to a bearish outlook. The future trajectory of Dogecoin's price is now heavily reliant on Musk's future pronouncements and the overall strength of the cryptocurrency market, underscoring the vulnerability of digital assets to social media influence.

Dogecoin experienced a decline of approximately 7 percent on June 6th, coinciding with an escalating public disagreement between President Trump and Elon Musk. This price drop, bringing Dogecoin to $0.17, followed a bear flag pattern, suggesting the potential for a further decline towards $0.06.

Source: Truth Social

The friction originated on June 5th, with a series of pointed exchanges between Musk and Trump on social media. Musk's departure from his position at the Department of Government Efficiency – jokingly referred to as "DOGE" – was followed by Trump's threat to terminate Musk's government contracts. In response, Musk criticized Trump's new spending proposal, labeling it the "Big Ugly Bill," and voiced support for impeachment calls. This conflict subsequently eroded confidence in Dogecoin.

Trading data reveals a 14 percent decrease in DOGE's value over the past seven days, extending a three-week downward trend to 28 percent. The bearish sentiment intensified when Musk attributed Trump's loss in the 2024 election to a lack of his support. Consequently, investors began to question Musk's continued commitment to promoting Dogecoin.

Source: Truth Social

Historically, Musk's social media activity has demonstrably influenced Dogecoin's price. In 2022, the token saw a jump of over 25 percent in a single day after Tesla began accepting DOGE for merchandise. Similarly, in 2023, Dogecoin surged 30 percent when Musk temporarily replaced Twitter's logo with the Shiba Inu dog. Dogecoin also experienced an upswing following Trump's victory in the 2024 presidential race, an outcome that had Musk's backing.

However, the present dispute has triggered a widespread sell-off. Traders are now concerned that reduced support from Musk will diminish Dogecoin's speculative appeal, potentially leading to further selling pressure.

From a technical perspective, the bear flag pattern typically manifests as a brief price rally within a descending channel. If the price breaks below the lower trend line of the flag, a rapid decline often ensues. In this scenario, a 66 percent drop would drive Dogecoin towards the $0.06 level, which aligns with support levels observed in early 2024 trading ranges.

Source: Tradingview

Meanwhile, other cryptocurrencies have also experienced declines, with Bitcoin and Ethereum slipping as overall sentiment turned negative. This has led to increased caution among crypto investors across the board. Furthermore, on-chain indicators point to reduced trading volumes, often a precursor to more significant market movements.

Looking ahead, Dogecoin's future hinges on two key factors: Musk's forthcoming public statements and the overall health of the crypto market. Should Musk resume expressing positive sentiments regarding Dogecoin, some buyers may return. Conversely, if the conflict intensifies, Dogecoin could face further downward pressure. Regardless, this episode highlights the potential for social media controversies to translate into tangible financial losses.

Investors should closely monitor any shifts in Musk's support for Dogecoin. Furthermore, tracking the broader crypto market is also advisable. Despite the current volatility, Dogecoin has demonstrated resilience over longer periods. Nevertheless, the token is currently trading under considerable pressure.

Source: DOGE/Tradingview

Dogecoin (DOGE) is currently trading at $0.17812 USD, reflecting a daily gain of +4.08%. This upward movement follows a sharp weekly correction of −17.17%, underscoring the token's inherent volatility and ongoing market recalibration.

On the monthly chart, DOGE has experienced a modest gain of +3.33%, but remains significantly down over the medium term, with losses of −60.74% in the last six months and −43.57% year-to-date.

Technically, Dogecoin is trading below its 23.6% Fibonacci retracement level and remains below key moving averages. After reaching a recent low of $0.1687, DOGE is currently consolidating and attempting a short-term reversal.

Source: DOGE/Tradingview

ETHNews analysts are anticipating a potential retest of the $0.19–$0.21 range, particularly if broader crypto market sentiment turns bullish. However, a failure to sustain momentum could result in a pullback to the $0.165–$0.160 support band.

On the ecosystem front, Coinbase recently launched wrapped Dogecoin (cbDOGE) on its Ethereum Layer 2 network, Base, facilitating DOGE integration into DeFi protocols. This development has seen users mint over 10.4 million cbDOGE, valued at nearly $1.9 million, signaling renewed developer and community interest in enhancing Dogecoin's interoperability within the broader crypto ecosystem.