Dogecoin experienced a sharp price drop in recent hours, driven by a selloff near resistance levels. This decline followed a statement from Elon Musk clarifying that the U.S. government, despite the similar-sounding name of his "Department of Government Efficiency" (DOGE), has no intention of adopting Dogecoin.

Dogecoin's Negative Netflow

The price drop significantly impacted Dogecoin's on-chain metrics. Coinglass data revealed over $9 million in total liquidations, including $6.5 million from long positions and $2.55 million from short positions. Open interest also decreased by 1.44%, falling to approximately $1.6 billion. This followed Musk's clarification regarding his initiative, which was initially called the "Government Efficiency Commission" before being renamed. The name change, coincidental yet reflective of Musk's known affinity for Dogecoin, followed a previous incident where a website mix-up featuring the Dogecoin mascot temporarily boosted the price by 14% in February.

Musk's denial of any government endorsement created market uncertainty. This led to decreased trader confidence and a subsequent price decline. Coinglass data further indicates a significant $4.2 million outflow from exchanges in the last 24 hours, suggesting some holders are withdrawing their assets. However, this could also signal accumulation at lower price points, potentially leading to price stabilization or even a rebound if buying pressure increases.

Dogecoin's Future Price Outlook

Dogecoin's price has fallen below the 20-day Exponential Moving Average (EMA), indicating a bearish short-term outlook. However, buyers are currently defending the $0.16 level. At the time of writing, Dogecoin is trading at $0.167, down 0.56% in the last 24 hours.

The declining 20-day EMA ($0.171) and a Relative Strength Index (RSI) below the midpoint reinforce the bearish short-term sentiment. The DOGE/USDT pair may retest the $0.143 support level. A break below this could push the price towards $0.11.

Conversely, a price increase from the current level, breaking above the 50-day Simple Moving Average (SMA), would signal bullish momentum. A push towards the EMA trend lines could lead to a break above the $0.2 resistance. Sustained buying pressure within the $0.25 resistance zone could propel Dogecoin towards $0.29.