Why Did The Dogecoin And Shiba Inu Price Crash Over 10% In One Week?
Dogecoin (DOGE) and Shiba Inu (SHIB) have experienced price declines of over 10% this week. The downtrend experienced by these meme coins is likely due to the macro side, which has cast doubts in the minds of crypto investors.
The US Fed’s Hawkish Stance Has Cast A Shadow Of Doubt
Dogecoin and Shiba Inu are believed to have declined this week thanks to the US Fed’s stance on interest rate cuts. The Consumer Price Index (CPI) inflation data came in lower than expectations, which provided a boost for the crypto market. However, Federal Reserve Chair Jerome Powell’s speech highlighted the Fed’s hawkish stance, as he suggested that the Central Bank wasn’t yet looking to cut interest rates.
His speech came following the US Fed’s decision to leave interest rates unchanged between 5.25% and 5.5%. This development has dampened investors’ confidence in investing in risk assets like cryptocurrencies. The crypto market, led by Bitcoin, experienced a decline following Powell’s speech, with the flagship crypto dropping from around $70,000 to $66,000.
Dogecoin and Shiba have had to bear a major brunt of this development, considering that investors are more likely to invest in utility tokens than meme coins amidst their fear of interest rates remaining unchanged throughout the year. Moreover, data from IntoTheBlock shows that the foremost meme coins still correlate with Bitcoin’s price. As such, they were expected to decline significantly alongside the flagship crypto.
Shiba Inu’s decline is also believed to be due to the massive selling pressure the meme coin faced recently. Bitcoinist reported that Shiba Inu whales moved 4.29 trillion Shiba Inu tokens to Coinbase, a move that suggested these investors were looking to offload their Shiba Inu holdings soon enough.
Dogecoin And Shiba Inu To Bounce Back
Crypto analyst CrediBULL Crypto recently mentioned that Dogecoin had reached a ‘make it or break it’ point. The analyst claimed this was good for the meme coin because Bitcoin had also dropped to its range lows simultaneously. He predicted that Dogecoin would rebound if Bitcoin enjoyed a price reversal.
Crypto analyst Kevin (formerly Yomi OG) also suggested that Dogecoin’s chart was healthy and that the foremost meme coin was primed for an upward trend. This came following his revelation that the 12-day time frame on the Gaussian channel just recently flipped green on Dogecoin’s chart for the first time since December 2020. He stated that indicates a bullish trend is on the horizon for Dogecoin.
Meanwhile, despite the selling pressure on Shiba Inu, the meme coin’s fundamentals paint a bullish picture, and it shouldn’t be long before it records a price rebound. Data from the burn tracking platform Shibburn shows that Shiba Inu’s burn rate has spiked by over 863% in the last 24 hours.
Featured image created with Dall.E, chart from Tradingview.com
