Dogecoin (DOGE) and Shiba Inu (SHIB) are currently experiencing a downtrend, reflecting the bearish sentiment towards these meme coins. This price decline can be attributed to various factors, including developments in the broader crypto market.
Dogecoin and Shiba Inu Following Bitcoin’s Path
Dogecoin and Shiba Inu have been closely following Bitcoin’s (BTC) price movements, which explains the continued downside pressure. Data from the market intelligence platform IntoTheBlock reveals that Dogecoin and Shiba Inu have a price correlation of 0.9 and 0.84, respectively, with Bitcoin, indicating a strong positive price correlation between these meme coins and the flagship cryptocurrency.
As a result, Dogecoin and Shiba Inu saw their prices spiral as Bitcoin dropped below $56,000 on September 5. On that day, Dogecoin fell to as low as $0.96, while Shiba Inu dropped to $0.00001309. The lack of bullish momentum for Bitcoin has also affected these meme coins, with macroeconomic factors playing a significant role.
According to a recent report by NewsBTC, the flagship cryptocurrency experienced a crash this week due to the ongoing effects of the Yen carry trade and its correlation with the US stock market, which has also suffered significant losses. These developments have shaken the confidence of investors in Dogecoin and Shiba Inu, leading to a decline in trading volume for these meme coins.
The decrease in trading volume has exacerbated the price decline for Dogecoin and Shiba Inu, as investors and traders are currently less enthusiastic about buying or trading these assets. Data from CoinMarketCap shows that DOGE’s trading volume has decreased by over 3%, while Shiba Inu’s trading volume has dropped by 12.86% during this period.
Historical data indicates that price declines for Dogecoin and Shiba Inu in September are not uncommon, as both coins have mostly recorded monthly losses during this month over the years. Interestingly, 2021 was the last time Dogecoin and Shiba Inu saw profits in September.
Potential for Further Decline
The bearish sentiment towards Bitcoin suggests that Dogecoin and Shiba Inu may face further price declines. Crypto analyst Ali Martinez recently predicted that Bitcoin could drop to as low as $40,600 if it fails to hold above the $51,000 support level. Additionally, Arthur Hayes, Co-Founder of BitMEX, mentioned in a social media post that Bitcoin is “heavy” and suggested that the flagship cryptocurrency could drop below $50,000 this weekend.
Currently, Dogecoin and Shiba Inu are trading below key support levels at $0.10 and $0.000020, respectively. If Bitcoin drops below $50,000, these meme coins could experience a significant free fall. For Dogecoin, the $0.077 price level is crucial, as 1.22 million addresses bought 23.2 billion DOGE at that price. Similarly, Shiba Inu risks dropping below the psychological level of $0.000010 if it falls below $0.000013, where 130.17 trillion SHIB were purchased.
The current market trends for Dogecoin and Shiba Inu highlight the importance of monitoring Bitcoin’s price movements and broader macroeconomic factors. Investors should stay informed and consider these factors when making trading decisions.
