The ongoing clash between President Donald Trump and SpaceX CEO Elon Musk has heavily impacted the cryptocurrency market. While the feud seems to have cooled somewhat, it remains a key topic of concern. Less confrontation was seen this week compared to the previous, which had a broader effect on the crypto space, reaching even its more speculative corners.

Meme coins, in particular, are feeling the pressure. Among them, Dogecoin (DOGE) dropped nearly 2% in the past 24 hours and more than 5% over the past seven days.

Elon Musk’s Role in Dogecoin’s Rise and Recent Setback

Musk, who is often called the "Dogefather" for his support of the token, has regularly mentioned it in public. His tweets and comments have usually caused DOGE’s price to surge. However, this time, a surprise statement from Elon Musk is having the opposite effect, sending Dogecoin into a sharp decline.

One moment that sparked excitement was his appointment to lead the Department of Government Efficiency (DOGE), which many saw as a light-hearted nod to the cryptocurrency. That appointment drew attention and temporarily renewed interest in the token.

But Musk has now declared the closure of the department, stating that its objective had been achieved. This move, though seemingly symbolic, has deflated the kind of enthusiasm that often supports Dogecoin’s speculative value. Without that additional spark from Musk, momentum around the token appears to have slowed noticeably.

Market Movement Reflects Sentiment Shift

Dogecoin’s price had been going up for the past few weeks. But on Thursday, between 16:00 and 20:00 UTC, things changed quickly. In just a few hours, the price dropped from about $0.19 to around $0.16 — a fall of over 15%.

The sharp drop triggered heavy selling as investors rushed to get out. That swift decline marked a break below the rising trendline.

Over the weekend, the meme coin king attempted a recovery but encountered strong resistance near the 100-day Simple Moving Average (SMA). After approaching this level, the price was firmly rejected. The rejection wasn’t solely due to the 100-day SMA—it also coincides with a horizontal resistance area from earlier price action. Together, they form a strong supply zone where selling pressure has taken over.

If the downtrend continues, lower price levels may still be ahead. Meanwhile, the Relative Strength Index (RSI) is currently around 39.49, with its signal line near 42.17. This places it in the lower range of the chart, reinforcing the current bearish momentum. Although there’s been a minor bounce in the RSI—suggesting a brief pause in selling pressure—the overall trend remains negative. The RSI remains below both its signal line and the neutral 50 level, indicating that buyers have yet to regain control.

Until the RSI crosses back above 50 and the price breaks through key resistance levels, the broader outlook for Dogecoin remains tilted to the downside.

Dogecoin at a Crossroads Amid Growing Bearish Signals

The price of DOGE is currently trading around $0.18 at the time of writing. For the bulls to take control again, the price must break above the 100-day SMA, the trendline, and eventually the 50-day SMA. If this doesn’t happen, Dogecoin’s price could continue its downtrend for some time.

Beyond technical indicators, market sentiment also plays a crucial role in DOGE’s price direction. To shift momentum back in their favor, bulls will likely need a meaningful change in either the crypto space or the political environment. The ongoing Trump-Musk clash has only added to the uncertainty, dragging down overall market confidence. A resolution could ease tensions, while a broader lift in the cryptocurrency market might help reverse the current sentiment. Until then, any upward moves may be short-lived.