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The price of Dogecoin skyrocketed during the final months of 2024, but throughout this year the cryptocurrency can’t seem to maintain its gains.
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Some investors may have drawn ties between Dogecoin and the Department of Government Efficiency (DOGE), believing the cryptocurrency would somehow benefit from the creation of this program.
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Recent comments from DOGE leader Elon Musk, combined with Dogecoin’s latest price action, make me think the hype narrative around the cryptocurrency is plummeting.
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10 stocks we like better than Dogecoin ›
So far in 2025, the stock market has been a mixed bag. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have all exhibited higher than usual levels of volatility. Between mixed economic data and ongoing tariff negotiations with trade partners, there is a lot of uncertainty surrounding the equity markets.
During times like these, it’s not unusual for investors to sell their stocks and redeploy capital into alternatives such as commodities, real estate, or even cryptocurrency. Over the last year, one cryptocurrency that has seen quite a bit of action is Dogecoin (CRYPTO: DOGE).
While Dogecoin’s momentum can be tempting to follow, I think its price could be headed to new lows sooner rather than later. Let’s explore Dogecoin’s price action over the last several months and try to uncover what’s been driving interest in this specific cryptocurrency. From there, I’ll detail why I think Dogecoin could be headed for a precipitous sell-off.
The chart below illustrates Dogecoin’s price action over the last 12 months. Although its price is up 37% over the last year, recent trends clearly show that Dogecoin is trading well below prior highs.
Does anything stick out to you as it relates to the timing of Dogecoin’s rise and its more recent sell-off?
Per the graph above, Dogecoin experienced an unprecedented rally in November. But why? In my opinion, I think Dogecoin’s parabolic rise was correlated with the outcome of the presidential election.
Following Donald Trump’s reelection in November, he created a new task force called the Department of Government Efficiency (DOGE). Moreover, Tesla CEO Elon Musk was nominated to lead this initiative.
In years past, Musk has demonstrated some support for Dogecoin — albeit in joking and facetious ways (like referring to himself as “The Dogefather” on an episode of Saturday Night Live). Nevertheless, it’s my thinking that some investors began creating a narrative that the acronym for the Department of Government Efficiency, coupled with Musk’s involvement, would somehow result in an endorsement for Dogecoin. In some ways, I can understand how an investor would connect these dots.
