Dogecoin’s rally, fueled by speculation about its potential role in the U.S. Department of Government Efficiency (D.O.G.E.) initiative, has hit a setback.

Elon Musk, a known supporter of the meme coin, has firmly denied any official adoption plans for Dogecoin.

However, despite this setback, technical indicators suggest that the meme coin could still be poised for future gains, according to some analysts.

Dogecoin will not be used by D.O.G.E.

Rumors of Dogecoin’s integration with D.O.G.E., a cost-cutting initiative linked to Musk and his allies, Donald Trump’s presidential campaign, and billionaire Mike Pence, set out to reduce government spending by $1 trillion over ten years.

The initiative, named D.O.G.E., sparked speculation in the crypto community about a possible role for Dogecoin in the initiative.

Excitement peaked after the meme coin’s logo briefly appeared on the official D.O.G.E. website following Trump’s inauguration. The appearance of the logo fueled a massive price surge.

However, the rally has lost momentum, and Dogecoin has dropped 10% in the past week, trading at $0.1669 at the time of writing.

Meanwhile, broader market trends and macroeconomic conditions continue to impact Dogecoin’s price. Finbold data shows that the number of Dogecoin millionaire addresses has dropped by over 40% since January.

The decline suggests that while smaller holders remain optimistic, larger investors have been exiting their positions.

The decrease in large-holdings may be linked to the lack of significant price movements in 2024, despite the hype surrounding the D.O.G.E. initiative and potential U.S. government institutions' adoption of cryptocurrencies.

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