Dogecoin (DOGE) has seen volatile price action over the past two trading days, driven by contrasting statements from President Donald Trump.

The market’s reaction to Trump’s comments saw memecoin prices move in opposite directions, highlighting the heightened volatility in crypto markets.

Dogecoin price action, March 27 | Source: CoinGecko

At press time, DOGE is trading down 2.4%, now trading below the $0.19 level, according to CoinGecko data.

Why is Dogecoin price down today?

On Monday, Trump renewed his support for the official TRUMP meme token, kicking off a rally across the altcoin landscape.

Memecoins like DOGE, PEPE, and SHIB all rose over 5%, pushing the total market capitalization of the memecoin sector above $62 billion by Tuesday.

However, the tide turned on Wednesday after Trump announced a 25% tariff on car imports, set to begin on April 2.

According to BBC reports, Elon Musk confirmed that the policy could have a substantial impact on Tesla’s bottom line.

This triggered major sell-offs in assets linked to Musk, including Tesla (TSLA) stock, which went down 5% in the 24 hours after the announcement, a 6% rebound when markets opened on Thursday. Given Musk’s well-documented ties to the Dogecoin community, DOGE’s rally quickly lost steam, resulting in a sharp 2.4% drop by Thursday.

Trump tariffs bring fresh volatility, Dogecoin open interest drops below $2 billion

Dogecoin’s 2.4% price decline on Thursday reflects the bearish sentiment surrounding Elon Musk-linked assets as markets process the economic implications of Trump’s proposed tariffs.

A deeper look into Dogecoin’s derivatives data reveals that traders are pulling capital out of the market, indicating heightened caution amid rising volatility.

Dogecoin derivatives markets analysis, March 27 | Source: Coinglass

According to the latest data from Coinglass, Dogecoin’s open interest has decreased significantly by 9.47% to $1.99 billion, even as its price dipped only 4%.

This disparity suggests that traders are closing out leveraged positions at a faster pace than the price decline, indicating a lack of confidence in DOGE’s near-term recovery.

When open interest drops noticeably faster than price, it usually signals reduced market participation and speculative interest, making further downside more likely.

Additional bearish signals support this outlook. Overall volume has decreased by 13.82% to $4.59 billion, showing reduced trading activity and liquidity.

Meanwhile, the 24-hour long/short ratio stands at 0.9673, indicating that short sellers are gaining an edge, putting further pressure on prices.

The liquidation data also reveals weak bullish momentum—over the last 12 hours, long traders have faced $1.3 million in liquidations, while shorts have only lost $739,620, showing that long positions are being unwound at a faster rate.

With falling open interest, decreasing volume, and mounting long liquidations, Dogecoin remains vulnerable to further downside unless market conditions stabilize or new bullish catalysts emerge.