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Trump-Musk Clash Triggers Memecoin Sell-Off; DOGE Leads Losses
Crypto markets were rocked Friday as a very public spat between Elon Musk and President Donald Trump triggered a flight from riskier digital assets, with Dogecoin (DOGE) leading the decline. DOGE dropped as much as 12%, as investors reeled from a combination of political volatility and renewed fears of a U.S. recession.
Musk, in a post on X (formerly Twitter), warned that Trump’s proposed tariff hikes could push the U.S. into a recession during the second half of 2025. The statement jolted markets, fueling broad-based selling across speculative assets.
Memecoin Sentiment Unravels
Dogecoin’s drop was swift and severe, breaking below short-term support at $0.17 before stabilizing near $0.167 in late Asian trading hours. The Musk-Trump clash rattled confidence in DOGE, which has historically surged on Musk-related enthusiasm but now appears caught in political crossfire.
Cardano (ADA) also saw sharp losses, falling over 6.5%, while other altcoins like SOL and XRP dropped between 3-5% amid thin liquidity and risk-off positioning.
Market View: When Personalities Become Macro Risk
“The market is increasingly pricing in the risk that high-profile political disputes could translate into policy uncertainty,” said Lara Chen, digital assets strategist at Fenwick Global. “Memecoins like DOGE are the first to feel that pressure because they’re sentiment-driven and closely tied to personalities like Musk.”
Trump’s team added fuel to the fire by distancing itself from a crypto project affiliated with the $TRUMP token, following legal disputes over branding. The resulting confusion only deepened bearish sentiment across political-themed crypto assets.
Institutions Hold Ground Amid Retail Exodus
While memecoins bled value, Bitcoin remained relatively stable, recovering from a brief dip below $101,000 to trade above $102,000 in Asia. Ether (ETH) followed suit, suggesting that institutional investors remain cautiously optimistic despite headline risk.
“There’s a disconnect now — Bitcoin is increasingly seen as a macro hedge, while altcoins and memecoins are being treated like high-beta plays,” said Chen. “DOGE is particularly exposed in this environment.”
