Newton Gitonga
Dogecoin witnessed a significant decline early today, losing over 6% of its value in the past day.
Amid the broad-based downsides, Elon Musk’s confirmation that the Department of Government Efficiency has no connection to the meme token intensified the selling pressure.
🚨 ELON MUSK: “There are no plans for the government to use dogecoin or anything.
I was going to call it Government Efficiency Commission but that’s a super boring name. Then the internet said it needs to be Department of Government Efficiency. I was like Internet is right.”
Musk addressed the speculations in his latest appearance in Green Bay, Wisconsin.
The Tesla CEO affirmed that he was not aware of any plans by the US government to use any crypto, including Dogecoin.
Musk’s comments trigger Dogecoin volatility
The crypto community has linked Dogecoin to the new US administration.
Many trusted the Musk-proposed Department of Government Efficiency would use the altcoin due to the somewhat similar names.
However, the SpaceX billionaire admitted that internet users suggested the name, forcing him to switch from his initial consideration, “Government Efficiency Commission.”
Musk stated:
I was going to call it Government Efficiency Commission, but that’s a super boring name. Then the internet said it needs to be the Department of Government Efficiency. I was like, the internet is right.”
While acknowledging the similarities, Musk emphasized that the government has no plans to utilize any cryptocurrency, including Dogecoin.
As expected, the remarks catalyzed notable volatility for the meme crypto.
DOGE price outlook
While Elon Musk’s comments seemed lighthearted, Dogecoin displayed its sensitivity.
The altcoin plunged $0.18 minutes after the post, postponing the much-anticipated move past $0.20.
DOGE changes hands at $0.1610, down over 6% on its daily chart.
The token has failed to keep pace despite the recently launched Dogecoin reserve, extending its weekly losses by over 8%.
Meanwhile, Dogecoin’s performance after Elon Musk’s comments mirrors previous trends.
It recorded substantial dips after co-lead Vivek Ramaswamy resigned.
Moreover, Musk catalyzed an over 10,000% Dogecoin price surge in 2021 with multiple endorsement posts.
Anxiety grips DOGE investors amid bearish sentiments
Amidst the uncertainty, crypto analyst and trader Ali Martinez observed a worrying signal.
Quoting Glassnode’s chart, he highlighted that the NUPL (Net Unrealized Profit/Loss) indicator for long-term holders flipped from belief to anxiety.
Martinez expects magnified price volatility due to the sentiment shift.
The declining NUPL shows most previously profited holders are nearing break-even or experiencing losses.
The sentiment shift coincides with the Dogecoin price underperformance and the broad market dips.
Thus, DOGE enthusiasts should brace for increased fluctuations in the upcoming weeks.
More investors may dump to prevent additional losses, amplifying the selling momentum.
Dogecoin bears will target the $0.15 barrier, which could serve as a rally Launchpad.
A bull resurgence could initiate rallies targeting the psychological zone at $0.20.
Above this zone, Dogecoin will eye $0.4, $0.5, and even $1.3.
However, losing $0.15 could dent short-term recovery chances with an approximately 20% dip to $0.13.
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