Why Did The Dogecoin And Shiba Inu Price Crash Over 10% In One Week?

Dogecoin and Shiba Inu: Price Declines Amidst Crypto Market Downtrend

Uncertainty and Volatility in the Cryptocurrency Market

This week, Dogecoin (DOGE) and Shiba Inu (SHIB) experienced significant price declines of over 10%. The downtrend can be attributed to macroeconomic factors that have raised concerns among investors.

Impact of the US Federal Reserve's Stance

The release of Consumer Price Index (CPI) inflation data below expectations initially boosted the crypto market. However, subsequent hawkish remarks by Federal Reserve Chair Jerome Powell cast a shadow of doubt. He indicated that the Fed was not yet inclined to cut interest rates.

This stance dampened investor confidence in risk assets, including cryptocurrencies. Led by Bitcoin, the crypto market witnessed a sharp correction following Powell's speech. As a result, Dogecoin and Shiba Inu, being speculative assets, bore the brunt of the sell-off.

Correlation with Bitcoin

Data from IntoTheBlock suggests that meme coins like Dogecoin and Shiba Inu remain highly correlated with Bitcoin's price movements. Therefore, their decline was largely influenced by Bitcoin's downward trajectory.

Shiba Inu's Sell Pressure

Shiba Inu's price drop can also be attributed to recent massive selling pressure. Whales moved 4.29 trillion Shiba Inu tokens to Coinbase, indicating their intention to sell their holdings.

Optimistic Outlook for Dogecoin and Shiba Inu

Despite the current challenges, analysts believe that Dogecoin and Shiba Inu have the potential to rebound. Bitcoin's recent recovery has boosted optimism, with analysts predicting a similar positive trend for Dogecoin.

Furthermore, the Shiba Inu burn rate has surged by over 863% in the past 24 hours, suggesting a positive long-term outlook for the coin.

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