DJT Stock Analysis: Why Trump Media Shares May Drop Below $5

The DJT stock price continued its strong downward trend and reached an all-time low, erasing billions of dollars in value. Trump Media dropped to $10, much lower than last year’s high of $54. This article explains why it may become a penny stock soon.

Trump Media Stock Price Has Crashed Because of the Crypto Market Plunge

One reason why the DJT stock price is on the verge of more downside is that Bitcoin and other cryptocurrencies have dived in the past few months.

Bitcoin price has dropped from its all-time high of $126,300 in October to $81,000 today. This is important because Trump Media is one of the biggest Bitcoin holders in the world with 11,542 coins.

These coins are now valued at $932 million. At Bitcoin’s top in October, these coins were valued at over $1.45 billion.

Therefore, DJT stock is falling as the value of its crypto holdings wanes. Also, it is crashing as demand for other Bitcoin treasury companies wanes. This also explains why other companies, such as MSTR, Metaplanet, Bullish, GD Culture, and Semler Scientific, have all declined this year.

Truth Social Has Not Gained Traction

The other main reason why the DJT stock price may continue to fall is that TruthSocial, its main product, has not gained traction among users, despite Donald Trump being the president.

Data compiled by SimilarWeb shows the website’s traffic dropped by 4.45% in October to 19.48 million. This is a tiny number considering that other top social media companies like X and Reddit had billions of users during the same period.

TruthSocial has failed to gain traction because it is associated with Donald Trump and his core supporters. Most liberals have largely avoided it.

Worse, there are signs that some core Trump voters have abandoned his movement because of some of his policies, including, most recently, the Jeffrey Epstein issue.

The worsening situation means that the company’s initiatives will likely not attract critical mass. This includes products like its prediction marketplace and streaming solution.

Trump Media is Not Making Money

The other main reason why the DJT stock price may crash further is that the company is not generating profits, despite Donald Trump being the US president.

The most recent numbers showed that its revenue dropped to $972,000 in the third quarter from over $1 million in the same period last year. Its nine-month revenue was just $2.6 million.

One of the original thesis for the company was that Trump’s presidency would attract large advertisers seeking favor with the administration. This has not happened yet.

The company is also losing substantial sums of money as it continues to invest in growth. Its net loss in the last quarter was over $54 million. That’s higher than the $19 million it lost in the third quarter of 2024. Its net loss in the first nine months of the year stood at over $106 million.

These numbers suggest that the company may need to raise capital in the future. It ended the last quarter with $166 million in cash and equivalents, $355 million in restricted cash, and $550 million in short-term investments. It also had $587 million in trading securities.

DJT Stock Price Technicals Point to More Downside

Technicals suggest that the DJT stock price has more downside. It has already lost the crucial support level at $15.40, its lowest level in April this year. Moving below that level confirmed the bearish outlook.

The stock has remained below all moving averages, a sign that the bearish momentum persists. Also, the Average Directional Index (ADX) has jumped to nearly 50. It’s a sign that the trend is strengthening.

Therefore, the most likely Trump Media stock outlook is bearish, with the next key support level to watch being $5.

DJT stock price chart | Source: TradingView

However, the risk for shorting Trump Media stock is that it is a meme stock, meaning that it may go through a short-squeeze now that its short interest has jumped to 7%.