Dogecoin plummeted 31%, is this a good opportunity to buy the bottom?

As the cryptocurrency market has been wildly volatile this year, Dogecoin plunged 31% in the latest week after experiencing a staggering 414% gain for the year.

The situation has investors wondering whether now is a good time to buy Dogecoin.

Dogecoin has been supported since 2021 by Elon Musk, who mentioned it frequently on social media and promoted Dogecoin on Saturday Night Live in May 2021.

This support saw Dogecoin price surge to an all-time high of $0.73, but it has since fallen by 92%.

In November 2024, after Trump was elected president, Dogecoin ushered in a wave of rebound. He excited investors by nominating pro-crypto businessman Paul Atkins to run the U.S. Securities and Exchange Commission (SEC) and naming Musk to lead a new Department of Government Efficiency, known as DOGE.

Dogecoin’s recent decline is largely due to new forecasts released by the U.S. Federal Reserve pointing to smaller interest rate cuts next year.

Although interest rate changes do not directly affect Dogecoin, higher funding costs tend to put pressure on speculative investments in financial markets.