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Dogecoin (DOGE) experienced a nearly 5% rally on Monday, gaining momentum as Donald Trump’s inauguration approaches. However, the cryptocurrency could be at risk of erasing its recent gains due to an imminent lawsuit uncovered by The Washington Post.
Allegations Against Elon Musk’s DOGE
The lawsuit alleges that Elon Musk’s Department of Government Efficiency (DOGE) is functioning as a federal advisory committee, violating a 1972 law. The complaint, obtained by The Washington Post, claims that DOGE is not exempt from Federal Advisory Committee Act (FACA) requirements, which mandate transparent and balanced advice to the administration. According to the complaint, DOGE has failed to meet several key requirements, including fairly balanced representation and public accessibility.
Impact on DOGE Price and Traders
DOGE has previously shown significant price movements in response to updates regarding the initiative led by Elon Musk and biotech entrepreneur Vivek Ramaswamy. As traders watch closely, the lawsuit could lead to a decline in DOGE’s value, adding to the uncertainty in the market.
Dogecoin Derivatives Market Reaction
Data from Coinglass reveals a decline in Open Interest (OI) and Options volume for DOGE in the last 24 hours. OI dropped by 6.53%, down to $5.25 billion, and options volume slipped nearly 13%. Over $43 million in long positions have been liquidated, indicating a possible price correction in the spot markets.
DOGE Price Forecast
Technical indicators suggest that DOGE is in an upward trend, with the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) supporting further gains. However, a drop to the nearest imbalance zone between $0.2978 and $0.3270 could result in a 20% price correction. As of now, DOGE trades at $0.3755, with the RSI reading 53 and sloping upwards, while MACD exhibits positive momentum.
