The Recent Price Decline of Dogecoin and Shiba Inu Explained
In the last 24 hours, Dogecoin and Shiba Inu prices fell by over 5% due to Jerome Powell’s bearish speech and hawkish Federal Reserve stance, despite a 25 basis point rate cut. Analysts predict continued declines but suggest recovery could occur as the dip may be viewed as a normal market correction.
In the past 24 hours, the prices of Dogecoin and Shiba Inu have experienced a notable decline, both dropping over 5%. This downturn occurred despite the Federal Reserve’s announcement of a 25 basis point rate cut. A primary factor contributing to this price drop is the speech delivered by Fed Chair Jerome Powell, which conveyed a bearish outlook for cryptocurrencies even in light of the rate reduction.
Powell characterized the Federal Reserve’s current stance as ‘hawkish’, indicating there may be fewer rate cuts in the future, particularly in 2025, following three cuts already made this year. This hawkish sentiment instilled caution among investors, particularly concerning risk assets such as Dogecoin and Shiba Inu. Within this context, cryptocurrency analyst Kevin Capital observed that the technical indicators for Dogecoin are currently unfavorable, projecting further declines unless the Fed shifts to a dovish position, which has not transpired.
Additionally, Powell’s remarks on the Strategic Bitcoin Reserve suggested that the U.S. Central Bank has no intention of holding Bitcoin or altering existing laws to do so. This declaration contributed to Bitcoin’s price falling below the $100,000 mark. Since both Dogecoin and Shiba Inu are positively correlated with Bitcoin, their prices are likely to reflect Bitcoin’s movements, further exacerbating their declines if Bitcoin continues to falter.
Looking forward, Kevin Capital indicated a bearish sentiment for Dogecoin in the short term, citing recent price action where Dogecoin has not been able to surpass critical Fibonacci levels. He highlighted that Dogecoin has experienced seven consecutive down candles and is now breaking below the macro .5 Fibonacci. Capital also referred to Bitcoin’s performance, noting that its inability to break past certain price levels could negatively impact both Dogecoin and Shiba Inu prices.
Despite these challenges, Capital remains optimistic about a potential recovery for Dogecoin and Shiba Inu. He argues that the market’s reactions to Powell’s speech may be excessive and anticipates that the current dip will attract buyers, describing the situation as a normal market correction.
The cryptocurrency market often reacts sensitively to economic indicators and central bank statements. Jerome Powell’s comments regarding the Federal Reserve’s future monetary policy can significantly impact investor sentiment in the crypto space. The correlation between cryptocurrencies and Bitcoin means that any significant movements in Bitcoin’s price will directly influence other altcoins like Dogecoin and Shiba Inu. Understanding these dynamics is crucial for investors navigating these volatile markets, especially in light of recent federal monetary policy adjustments.
In summary, the notable decline in Dogecoin and Shiba Inu prices can be attributed to Jerome Powell’s bearish commentary on the cryptocurrency market, coupled with a hawkish outlook from the Federal Reserve despite a recent rate cut. With both cryptocurrencies closely tied to Bitcoin’s performance, continued vigilance will be required as market reactions unfold. However, analysts suggest that this may merely be a market correction, with potential for future recovery as investor sentiment shifts.
Original Source: bitcoinist.com
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