Analyzing the Recent Decline in Dogecoin and Shiba Inu Prices
In recent days, both Dogecoin and Shiba Inu have experienced significant price drops, causing concern among investors of these popular meme coins. Several factors have contributed to this bearish trend, including geopolitical issues and economic policies.
Factors Behind the Dogecoin and Shiba Inu Price Declines
According to CoinMarketCap data, Dogecoin’s price has fallen by over 14%, while Shiba Inu has decreased by 12% in the past 24 hours. This decline is largely attributed to former President Donald Trump’s announcement of a 25% tariff on imports from Canada and Mexico, effective immediately. This decision has sparked fears of a trade war, leading to a massive sell-off among cryptocurrency investors, which is detrimental to market stability.
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The trade tensions escalated as Canada imposed retaliatory tariffs on the United States, further exacerbating the declining prices of Dogecoin and Shiba Inu. Additionally, Trump’s executive order to increase tariffs on Chinese imports to 20% has intensified market instability, with China responding by raising tariffs on U.S. goods to 15%.
Another key factor in the price drop is the Trump administration’s decision to halt military aid to Ukraine, creating further uncertainty in the market. This geopolitical tension has led investors to reassess their risk allocations, resulting in additional sell-offs of these volatile assets.
Moreover, the Federal Reserve’s ongoing quantitative tightening measures have contributed to the liquidity crunch for Dogecoin and Shiba Inu. The Fed’s indication that interest rates are unlikely to decrease soon has dampened investor enthusiasm for these speculative assets. The Atlanta Federal Reserve’s downward revision of the GDP estimate for the first quarter of this year has also added to the bearish outlook for these cryptocurrencies.
Recent Developments in the Cryptocurrency Landscape
The broader cryptocurrency market has also been affected by several developments, contributing to the downward trend in Dogecoin and Shiba Inu prices. One notable issue is the controversy surrounding the crypto strategic reserve. Some stakeholders, including Tyler Winklevoss, co-founder of Gemini, have argued against the inclusion of altcoins in the reserve.
Trump’s announcement that altcoins such as Ethereum, Solana, XRP, and Cardano, among others, would be part of the crypto strategic reserve has sparked skepticism. The inclusion of multiple cryptocurrencies, beyond Bitcoin, has diluted the perceived value of the reserve, creating a negative sentiment among investors.
Additionally, the price of Bitcoin has also seen a decline, which has adversely affected Dogecoin and Shiba Inu due to their strong positive correlation. Bitcoin’s price drop is partly due to the need to fill CME gaps at $85,000 and $78,000. Historically, Bitcoin tends to fill these gaps, which implies potential further declines for Dogecoin and Shiba Inu.
