Dogecoin (DOGE) may be back in the top ten cryptocurrencies by market cap, but its losses in both USD and Bitcoin (BTC) terms since Elon Musk’s SNL appearance are significant.
Dogecoin loses musky effect
Trading pair DOGE/BTC is down 75% after peaking at 1,287 satoshis on May 9, 2021, a day after Musk guest-hosted Saturday Night Live, including a sketch titled “The Dogefather.”
DOGE/BTC daily chart. Source: TradingView
Before his performance, the billionaire entrepreneur tirelessly tweeted Dogecoin memes, images that helped DOGE — a cryptocurrency that started as a joke — to a market cap of over $90 billion in May 2021.
That’s more than 36,000% gains in just two years. But things have gone downhill since then.
Investors expressed hope that even an optimistic wink from Musk on SNL to DOGE would prompt his 106 million followers to buy the meme token. But Musk did something unpredictable: He called Dogecoin a “hustle.”
A day later, DOGE’s price started falling from its all-time high. It continues its downtrend to this day, changing hands for around 300 satoshis from its peak of 1,287 satoshis.
At the same time, Dogecoin’s price has plunged more than 90% against the US dollar after peaking at $0.76 in May 2021.
Elon Musk’s efforts to keep Dogecoin relevant
Musk has since made several efforts to reignite people’s interest in Dogecoin.
In May 2021 he announced that since 2019 he has been working with Dogecoin developers to improve the transaction efficiency of his blockchain. Additionally, Musk’s Tesla and SpaceX also began accepting DOGE payments for their goods, leading to a strong but short-lived price rally.
Additionally, during a market crash in March 2022, Musk stated that he would not sell his crypto holdings, including DOGE and Bitcoin. Even so, Tesla sold 75% of its Bitcoin holdings three months after Musk’s statement.
As a general principle for those seeking advice from this thread, owning physical things like a house or stocks in companies you think make good products is generally better than dollars when inflation is high.
I still own my Bitcoin, Ethereum or Doge fwiw and will not sell them.
— Elon Musk (@elonmusk) March 14, 2022
The prospect of adding a DOGE payment option to Twitter also collapsed after Musk backed out of buying the social media giant.
In September 2022, Tesla launched Cyberwhistle, a limited edition collectible inspired by its Cybertruck vehicle that users can only purchase through Dogecoin.
Will Dogecoin then recover?
Traders have started to ignore Musk’s acclaimed association with Dogecoin given their half-hearted reactions to his DOGE-related updates of late.
Instead, traders appear to have focused more on macrocatalysts of late, most notably the Federal Reserve’s back-to-back rate hikes that have put downward pressure on cryptocurrencies, stocks, and similar risk-on assets in 2022 and beyond.
Related: Dogecoin Becomes 2nd Largest PoW Cryptocurrency
The technical setups also indicate this. For example, on the weekly chart, DOGE/BTC is now testing 307 satoshis as preliminary support given the level’s history as a strong price floor since November 2021.
Weekly DOGE/BTC price chart. Source: TradingView
A decisive break below 307 satoshis would see DOGE/BTC test its 200-week exponential moving average (200-week EMA; the blue wave) near 244 satoshis as a downside target in 2022 – a 20-percent drop %.
A 40% drop against the dollar
DOGE price has been trending within a wide descending channel against the US Dollar since its May 2021 peak and is now looking at its lower trend line as the next downside target.
Weekly DOGE/USD price chart. Source: TradingView
The target appears to be in the $0.048 to $0.036 range considering these levels have served as support in the past. Therefore, DOGE could fall about 40% against the dollar in the fourth quarter of 2022.
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