Dogecoin (DOGE) has managed to hold its ground at the $0.35 support level following a 9% drop triggered by the latest announcement from the US Federal Reserve. Although the Fed’s 25 basis point rate cut was widely anticipated, their resistance to rate cuts in 2025 sparked a broad sell-off in risk assets, including cryptocurrencies.
The $0.33-$0.35 price range has served as a strong floor for Dogecoin since mid-2021. A breach below this level could open the door for a significant decline, potentially revisiting early 2024 highs around $0.23. However, DOGE currently enjoys support from its 50-day moving average (50DMA) and robust investor sentiment, bolstered by November’s Trump rally.
Despite these short-term risks, Dogecoin’s long-term prospects remain promising, with 2025 shaping up to be a pivotal year for the popular meme coin. Several factors could drive its performance:
Crypto-Friendly Policies: The Trump administration’s pro-crypto stance and a new, more supportive US Congress may herald a golden era for digital assets. Proposals to establish US Bitcoin reserves and expand the strategic adoption of cryptocurrencies worldwide are generating considerable excitement within the crypto community.
Elon Musk’s Endorsement: Dogecoin continues to benefit from its association with Elon Musk, whose influence keeps the coin in the spotlight. The establishment of the Department of Government Efficiency (D.O.G.E.), named after Dogecoin, underscores its enduring relevance. Musk’s long-standing support positions DOGE as a leader in the meme coin category.
If these elements align, Dogecoin could leverage its first-mover advantage and potentially surge toward the $1 mark.
Historical performance offers additional reason for optimism. During previous Bitcoin (BTC) bull runs in April 2017, December 2020, and November 2024, Dogecoin initially lagged behind BTC’s price discovery phase but achieved new highs within 1-3 months. If history repeats, a Dogecoin breakout by early 2025 is highly plausible. Its consistent track record of catching up to Bitcoin’s momentum underscores the potential for significant price gains.