The Trump Media stock price has been in a strong freefall this year. DJT dropped to $11, down by 61% in the last 12 months, moving its market cap to $3.5 billion from $7.5 billion on the same period the previous year.
Top Three Reasons Why the Trump Media Stock Has Crashed
There are three main reasons why the DJT share price has plunged this year. First, the stock dropped because of the ongoing performance, with all its products struggling. For example, TruthSocial is still a niche product that has not seen a strong uptick in users.
The most recent financials showed that the company’s quarterly loss jumped to $55 million, more than the $19 million it lost in the same period last year. Its net revenue was less than $1 million despite launching numerous products, including a prediction market.
Second, the stock has plunged because of the ongoing woes in the crypto market and Bitcoin treasury companies. Most companies like Strategy, Metaplanet, MicroCloud Hologram, and Semler Scientific have all plunged. This is important as the company holds 11,542 coins worth over $1.1 billion. It also owns Cronos (CRO) tokens worth over $148 million.
READ MORE: Will Crypto Recover as Fear and Greed Index Nears Buy Zone?
Third, the ongoing DJT stock crash is mostly because of the ongoing retreat in assets associated with Donald Trump. For example, crypto tokens like TRUMP and WLFI have all plunged by double digits from their all-time highs. Similarly, American Bitcoin (ABTC), which is associated with his sons, has also crashed.
Additionally, the company has come under attack by short-sellers who doubt its future. Its short interest has moved to 6%, a trend that may continue over time.
DJT Stock Price Technical Analysis
The daily chart shows that the DJT share price has continued its strong downtrend in the past few months. It has moved below the lower side of the descending triangle pattern at $15.
The Average Directional Index (ADX) has moved to 40, a sign that the downtrend is gaining momentum. Also, the Relative Strength Index (RSI) has moved to the oversold level at 20.
Therefore, the Trump Media stock price will likely continue falling as its fundamentals worsen. The most likely scenario is where it moves below $10 and eventually drops to become a penny stock.
However, there is a likelihood that the stock will rebound and retest the lower side of the descending triangle pattern. This is known as a break-and-retest pattern.
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