The price of Dogecoin (DOGE) plummeted on Wednesday, dropping 9% as risk assets broadly declined following a more hawkish-than-expected policy announcement from the U.S. Federal Reserve. The Fed cut interest rates by 25 basis points but fell short of expectations for a continued rapid rate cut in 2025.
Despite a significant drop on the day, the price of Dogecoin remains above support in the form of the 50DMA and the recent low of around 0.35 dollars.
After a strong price surge in recent weeks following Donald Trump's election victory in early November, some are concerned that a deeper pullback may occur in the short term.
0.33-35 dollars is a crucial level for Dogecoin since mid-2021. If this level is broken, the price of Dogecoin risks a sharp drop back to its early 2024 high of 0.23 dollars.
While Dogecoin investors may need to prepare for a short-term market pullback, there are still many reasons to be optimistic about this cryptocurrency's prospects in 2025.
Here are the reasons.
Dogecoin Price Outlook for 2025 – When Will DOGE Reach $1?
Dogecoin has two key factors working in its favor.
First, the emergence of the Trump administration and the new U.S. Congress is expected to usher in a new golden age for the cryptocurrency industry in the U.S.
Meanwhile, discussions about establishing a strategic reserve force in the U.S. and other major countries continue to escalate.
These combined factors indicate a significant upside potential for major cryptocurrencies in the future – as the number one meme coin, Dogecoin is well-positioned to benefit.
Secondly, Dogecoin has a close connection with the new Trump administration, as the newly established Department of Government Efficiency (DOGE) by Elon Musk is named after this coin.
Musk has long been a supporter and proponent of Dogecoin. This largest meme coin in the world will certainly account for a significant portion of the meme coin market when Musk's DOGE makes headlines, whether good or bad.
So, assuming everything goes according to plan – Bitcoin reserves are established and the cryptocurrency industry explodes – then in the coming years, it will likely be a matter of when, not if, Dogecoin reaches $1.
Analyzing the relationship between Dogecoin and Bitcoin in the last three market cycles can help us answer this question.
In the last three market cycles, when Bitcoin (BTC) entered a new price discovery phase (as in April 2017, December 2020, and most recently in November 2024), Dogecoin has always been significantly below its record high.
This time is no different. But in the last two market cycles, Dogecoin's price took only 1-3 months to catch up and break its own record high.
So, assuming history repeats itself, DOGE could break through in early 2025, with the potential to quickly reach $1.
DYOR! #Write2Win #Write&Earn $DOGE