Dogecoin after the rally following the elections: what went wrong with the 1 dollar thesis

Source: Yellow Original Title: Dogecoin after the post-election surge: what went wrong with the 1 dollar thesis

Original Link: Dogecoin (DOGE) experienced a strong rebound after the 2024 U.S. presidential elections, rekindling long-held hopes that the token could finally reach the one-dollar mark.

But as the enthusiasm waned, the structural limitations surrounding supply, liquidity, and real-world use quickly came to light, undermining the sustainability of the movement.

Election-driven speculation fueled the rebound

Dogecoin gained momentum in the weeks following the electoral victory in November 2024, recording a triple-digit percentage increase during the month and closing the year just below $0.50.

The rebound has rekindled retail speculation about a possible move towards 1 dollar, a target that has long served as a psychological milestone for this meme-based asset.

Speculative interest intensified further after officials were appointed to lead the newly created Department of Government Efficiency, commonly abbreviated as “DOGE”.

The coincidence of the acronym, combined with previous public comments about Dogecoin, drove aggressive short-term buying.

However, that momentum proved fragile as market conditions changed.

The dynamics of supply limited the rebound

As Dogecoin approached its highs of late 2024, selling pressure increased.

A move towards 1 dollar would imply a market capitalization close to 150 billion dollars according to the current circulating supply, placing Dogecoin among the largest digital assets in the world.

Unlike Bitcoin (BTC), Dogecoin does not have a fixed supply limit.

Approximately five billion new tokens enter circulation each year, creating a persistent inflation that raises the level of demand needed just to maintain price stability.

Profit-taking accelerated near the $0.48 area, turning that level into a strong resistance zone.

Subsequent recovery attempts in early 2025 did not manage to surpass it, and trading activity decreased.

The daily volume, which had surged during the rally, fell sharply as participation decreased.

On-chain data showed limited accumulation by large holders during the correction, leaving the market largely driven by retail flows.

Limited utility and moderate demand for investment products

Beyond price action, Dogecoin continues to face challenges regarding adoption.

The acceptance by merchants remains limited, with usage concentrated more on niche online services than on widespread payment.

Technical limitations, including a relatively slow transaction completion compared to traditional payment networks, further limit its competitiveness as a payment method.

The launch of regulated investment products at the end of 2025 also failed to generate significant demand.

Although the products listed in the U.S. represented a milestone in terms of access, the assets under management remained modest compared to Bitcoin and Ethereum products, and the flows into the funds were irregular.