Due to the Federal Reserve's announced policy stance being more hawkish than expected, risk assets across the board plummeted, and Dogecoin (DOGE) suffered a heavy blow on Wednesday, plummeting 9%.
The Federal Reserve cut interest rates by 25 basis points, but curtailed expectations for a continuous rapid rate cut in 2025. Even though there was a significant drop during the day, Dogecoin's price is still maintained above the 50 DMA support level, with the recent range low around $0.35.
Since Donald Trump won the election in early November, gold prices have shown a strong upward trend in recent weeks; however, some people worry that there may be a deeper pullback in the short term. $0.33 - $0.35 has always been a key level for Dogecoin, and it remained so until mid-2021.
If it falls to this level, the price of Dogecoin will face significant downside risks, sliding towards the early 2024 high of $0.23. Although Dogecoin investors may need to prepare for a downturn in the short-term market, there are still plenty of reasons to be optimistic about the development prospects of this cryptocurrency in 2025.
The reasons are as follows.
The price outlook for Dogecoin in 2025 is optimistic - when will Dogecoin reach $1?
Dogecoin has two main favorable factors.
Firstly, the advent of the Trump administration and the new U.S. Congress is expected to usher in a new golden era for the U.S. cryptocurrency industry. Meanwhile, discussions among the U.S. and other major countries about establishing a U.S. strategic reserve are becoming increasingly frequent. These combined factors show that the major cryptocurrencies have huge growth potential in the future - as the number one meme coin, Dogecoin is in a favorable position to benefit.
Secondly, Dogecoin has a complex relationship with the new Trump administration, and Elon Musk's newly established Department of Efficiency (DOGE) is named after Dogecoin.
Musk has always been a long-term supporter and advocate of Dogecoin. Regardless of good or bad, as Musk's Dogecoin becomes headline news, the world's largest meme coin is almost certain to take a leading position in the meme coin market.
Therefore, assuming everything goes as planned - Bitcoin reserves are built and the crypto industry thrives - in the coming years, Dogecoin reaching $1 may just be a matter of time, not if.
Analyzing the relationship between Dogecoin and Bitcoin over the past three market cycles can help us answer this question.
In the past three market cycles, when Bitcoin (BTC) enters a new price discovery phase (such as in April 2017, December 2020, and most recently in November 2024), Dogecoin's price has always been far below its historical high.
This time is no exception. However, in the past two market cycles, Dogecoin's price took only 1-3 months to catch up and break through its historical high.
Therefore, assuming history repeats itself, DOGE's breakout may come as early as the beginning of 2025 and may quickly fall to $1.
