Market Watch: Analyzing the Recent Decline in Dogecoin and Shiba Inu Prices
In recent developments, the prices of popular meme cryptocurrencies, Dogecoin and Shiba Inu, have experienced notable declines. This downturn has fueled bearish sentiment among investors, drawing attention to the broader implications of geopolitical tensions in the Middle East, particularly between Israel and Iran.
Understanding the Decline in Dogecoin and Shiba Inu Prices
According to data from CoinMarketCap, Dogecoin and Shiba Inu have seen significant price drops over the past week. The most pronounced decline occurred on June 13, coinciding with Israel’s military actions against Iran, which heightened regional tensions. Such geopolitical unrest has historically triggered fear in financial markets, and this instance was no different, causing a sharp downturn in these meme coins.
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The situation intensified with Iran’s retaliatory measures against Israel, leading to further market instability. The ongoing exchanges of fire between these nations, with explosions heard in Jerusalem and Tel Aviv, have raised the specter of a potential full-scale conflict. This prospect has further dampened investor confidence in Dogecoin and Shiba Inu.
Additionally, the geopolitical crisis has led to a surge in oil prices, which poses a threat to the stability of meme coins. Rising oil prices contribute to inflationary pressures, potentially compelling the US Federal Reserve to maintain or increase interest rates. Such monetary policy actions, specifically Quantitative Tightening (QT), restrict liquidity and could adversely affect the value of cryptocurrencies like Dogecoin and Shiba Inu.
Market Response and Trading Trends
In light of this market downturn, data from Coinglass reveals a decline in Dogecoin’s open interest by over 2%, now standing at $1.78 billion. This brings it close to its December 2024 lows, when it fell sharply from a local high of $0.45. Furthermore, DOGE’s derivative trading volume has plummeted by 37%, signifying waning interest among crypto traders. Currently, the majority of traders are shorting Dogecoin, with a long-to-short ratio of 0.9.
Similarly, Coinglass data highlights a bearish outlook for Shiba Inu. SHIB’s derivatives trading volume has decreased by over 38% to $173 million, with a long-to-short ratio mirroring that of Dogecoin at 0.9. However, there’s a glimmer of optimism as the open interest for Shiba Inu has risen by nearly 1% to $142 million.
Potential Reversal for DOGE and SHIB
Despite the current bearish sentiment, there is a possibility of reversal for both Dogecoin and Shiba Inu. Crypto analyst Trader Tardigrade has posited that Dogecoin may have reached a bottom at its present price level. In a social media post, he suggested that the meme coin concluded its wave 4 corrective move, potentially setting the stage for a significant wave 5 rally. His analysis indicates that DOGE could ascend above $0.65, aiming for a new all-time high.
Meanwhile, crypto analyst InvestingHaven has presented a case for Shiba Inu’s recovery. He noted that SHIB maintained its robust support at $0.000012345 during crucial periods, aligning with anticipated annual lows at $0.0000133. The analyst observed signs of a potential W-reversal on the chart, suggesting that a successful reversal could propel SHIB to approximately $0.0000666.
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