Dogecoin Price Risks 30% Crash Despite DOGE Reserve Announcement

Dogecoin (DOGE) faces risks of declining by 30% in the coming weeks, driven by a bearish technical setup that has overshadowed the Dogecoin Foundation’s recent efforts to stabilize the cryptocurrency.

Bear Flag Signals 30% DOGE Crash Risks

A bear flag pattern on the DOGE/USD daily chart is the primary driver of the current bearish outlook.

This pattern formed after a steep decline from a high of $0.214 in late 2024, followed by a consolidation phase between a descending upper trendline and a lower support near $0.137.

On March 24, DOGE tested the upper trendline but closed with a red candle, indicating rejection and reinforcing bearish momentum. If the price revisits and breaks below the lower trendline, it could trigger a 30% drop, potentially pushing DOGE to $0.11 or lower.

DOGE’s bear flag downside target is measured after adding the previous downtrend’s height to its potential breakdown point.

Meanwhile, the Relative Strength Index (RSI) at 47.45, down from 58.71, further supports this outlook, showing waning buying pressure as the market cools. A recent death cross between DOGE’s 50-day (red) and 200-day (blue) exponential moving averages (EMA) doubles down on the bearish outlook.

Dogecoin Foundation Buys 10M DOGE For Official Reserve

On March 24, 2025, the Dogecoin Foundation unveiled its “Official Dogecoin Reserve,” which aims to enhance stability and attract institutional interest in the meme-based cryptocurrency.

The foundation actively purchased an initial batch of 10 million DOGE coins, targeting the persistent volatility that has long defined Dogecoin’s market behavior, often fueled by speculative trading and social media buzz.

#Dogecoin daily candle closed 💥$Doge is struggling to break a Descending Trendline🔴, still staying below this Resistance after several attempts.

Yet👀, RSI has shown a breakout🟢, indicating that $Doge has gained significant momentum recently.
✍️ A strong uptrend could occur… pic.twitter.com/5FU4RKdKVH

— Trader Tardigrade (@TATrader_Alan) March 25, 2025

The move seeks to position Dogecoin as a more credible asset, potentially encouraging wider adoption in payments and other applications.

However, DOGE’s diminished upside momentum, witnessed through its intraday decline on March 25, indicates profit-taking among traders. In other words, most traders may not see the news as extremely bullish for the cryptocurrency, a sentiment rising primarily due to an overall decline in risk sentiment.

The bearish outlook for Dogecoin is significantly influenced by macroeconomic uncertainties stemming from US President Donald Trump’s aggressive tariff policies, which have sparked widespread market turbulence.

The Musk Connection

Elon Musk’s close association with Dogecoin, often called his “favorite” cryptocurrency, is compounding the downside pressure. This association has historically tied the memecoin’s fortunes to his business ventures, particularly Tesla (TSLA).

Tesla’s stock has plummeted over 50% since late 2024, driven by falling sales, production challenges, and Musk’s involvement in Trump’s administration, which some investors believe has distracted him from effectively managing Tesla.

Tesla’s stock fell 15% on March 11 alone, wiping out $16 billion in value.

Given Dogecoin’s positive correlation with Tesla’s performance—where the memecoin often mirrors Tesla’s market movements—this stock crash seems to have eroded long-term confidence in DOGE, further reinforcing the 30% crash outlook discussed above.