Dogecoin (DOGE) plummeted 16% this week amid an escalating public feud between Elon Musk and former President Donald Trump, triggering nearly $1 billion in crypto market liquidations. The conflict, which began over a government spending bill, has rapidly evolved into a high-stakes political drama with significant implications for both the crypto market and Musk’s business empire.
This market turmoil follows a pattern similar to what we saw in last week’s $621M crypto market plunge during the initial Trump-Musk Twitter confrontation. The situation has only intensified since then.
Department of Government Efficiency Exit Sparks Selloff
The catalyst for DOGE’s decline came when Elon Musk officially resigned from his position at the Department of Government Efficiency (DOGE) on Thursday. The departure followed his public criticism of Trump’s spending bill, leading to a heated exchange that quickly escalated beyond policy disagreements.
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Market Impact and Liquidations
The cryptocurrency market experienced severe turbulence as the conflict unfolded:
- Dogecoin dropped 11% in 24 hours, extending to a 16% weekly decline
- Total market liquidations reached $982 million
- Long positions saw $881 million in losses
- Short positions recorded $100 million in liquidations
Tesla Stock Fallout
The impact extended beyond crypto markets, with Tesla shares dropping 13% after Trump threatened to cancel federal contracts with Musk’s companies. This development has created additional pressure on DOGE, given the historical correlation between Tesla’s performance and Dogecoin price movements.
Expert Analysis
Market analysts suggest this could mark a crucial turning point for Dogecoin, which has historically relied heavily on Musk’s influence. Recent technical analysis indicates DOGE faces a critical support test, with some experts warning of potential further downside.
FAQ Section
How long could this price impact last?
Historical data suggests similar political-driven crypto selloffs typically resolve within 2-3 weeks, though the unique nature of this situation could extend the recovery period.
Will this affect other cryptocurrencies?
The broader crypto market has shown correlation with this event, particularly affecting meme coins and Tesla-related tokens.
What’s the potential bottom for Dogecoin?
Technical analysts identify key support levels at $0.167, with potential for further drawdown if this level fails to hold.