Trump Media stock continued its strong downward trend, reaching its lowest level on record as headwinds jumped. DJT fell to $6.9, down by 60% from its highest point this year and 33% below its highest point in August. This sell-off may continue as the company faces some major headwinds.
Trump Media is facing headwinds
DJT stock has continued its strong downward trend this month as the company faces major headwinds. One of them is that President Donald Trump’s approval rating has continued to fall because of the rising inflation. A report released this week showed that the headline Consumer Price Index (CPI) rose 3.7% in September. Core inflation rose 2.7% last month.
Trump’s approval rate has plunged to a record low, with his net approval moving to minus 27. 34% of the voters approve his work, while 61% of them disapprove. Trump is being opposed by Republicans, Democrats, and Independents because of his corruption and the ongoing US-Iran war.
The ongoing approval rating drop is also affecting traffic to the Truth Social website. SimilarWeb data shows that the website had 15.31 million visits in September. While this increase was an 11% monthly jump, it remains much lower than its competitors. For example, X and Reddit had 4.18 billion and 3.82 billion, respectively.
Trump Media is also not making money. The most recent results showed that it made a net loss of $238 million in the June quarter and $643 million in the first six months of the year. Large advertisers have stayed away from Truth Social, while the recently launched API solution will not make it a lot of money in the long term.
DJT stock has also slumped because Bitcoin has lost momentum. Bitcoin has dropped from a high of $87,000 earlier this month to the current $81,000. Trump Media is the 10th-largest Bitcoin holder in the world, with 12,062 coins. Its coins are now valued at $977 million.
Trump Media is also highly overvalued, considering that it has not made money at the peak of Trump’s presidency. A $2 billion valuation for a company losing substantial sums of money per quarter is quite expensive.
DJT stock technicals point to more downside
The daily chart shows that Trump Media stock has been in a strong sell-off in the past few months. It has dropped from $10.56 in August to the current $6.99.
The stock has dropped below the 50-day moving average. It has also formed an inverted cup-and-handle pattern, a common continuation sign.
DJT stock’s Average Directional Index (ADX) has risen to 21, its highest point 21, its highest point since August. Therefore, the stock will likely continue falling, potentially to the key support level of $5. A drop below that level will point to further downside, towards $3.