Reasons Behind the Declining Prices of Dogecoin and Shiba Inu Today

Cryptonews John Brightwater September 7, 2024

Reasons Behind the Declining Prices of Dogecoin and Shiba Inu Today

In recent days, Dogecoin (DOGE) and Shiba Inu (SHIB) have entered a downward trajectory, reflecting the bearish market sentiment surrounding these popular meme-based cryptocurrencies. This decline can be attributed to various factors, particularly developments within the wider cryptocurrency market.

Both Dogecoin and Shiba Inu have exhibited strong correlations with Bitcoin, which serves to explain their current price pressures. According to data from the market intelligence platform IntoTheBlock, Dogecoin and Shiba Inu share a price correlation of 0.9 and 0.84, respectively, with Bitcoin, indicating a significant positive relationship between these meme currencies and the leading cryptocurrency.

As Bitcoin’s price fell below $56,000 on September 5, both Dogecoin and Shiba Inu experienced sharp declines, with Dogecoin reaching a low of approximately $0.96 and Shiba Inu dropping to around $0.00001309. The lack of bullish momentum for both Bitcoin and these meme coins underscores their susceptibility to macroeconomic factors influencing market confidence.

Furthermore, as recently reported by NewsBTC, the decline in Bitcoin’s value has been influenced by ongoing effects from the Yen carry trade and its correlation with the US stock market, which has also faced significant losses this week. Such developments have led to a decrease in investor confidence in Dogecoin and Shiba Inu, with both cryptocurrencies seeing a decline in trading volumes, which further exacerbates their price declines. Data from CoinMarketCap indicates that Dogecoin’s trading volume has decreased by over 3%, while Shiba Inu’s trading volume has seen a more substantial reduction of 12.86% during this challenging period.

Historical analysis suggests that price declines for Dogecoin and Shiba Inu are not uncommon in September, as both cryptocurrencies have frequently registered monthly losses during this timeframe. It is notable that September 2021 marked the last instance where both Dogecoin and Shiba Inu recorded gains within this month.

Looking ahead, the bearish sentiment pertaining to Bitcoin raises concerns regarding potential further declines for Dogecoin and Shiba Inu. Prominent crypto analyst Ali Martinez has predicted that Bitcoin could potentially fall to as low as $40,600 should it fail to maintain support above the $51,000 level. Additionally, Arthur Hayes, co-founder of BitMEX, asserted in a recent post on X (formerly Twitter) that Bitcoin appears to be under pressure and may fall below $50,000 in the near term.

Currently, Dogecoin and Shiba Inu are trading below critical support levels of $0.10 and $0.000020, respectively, making them vulnerable to significant declines should Bitcoin continue to weaken. Investors should monitor the key price level of $0.077 for Dogecoin, where 1.22 million addresses hold approximately 23.2 billion DOGE. Similarly, for Shiba Inu, a pivotal price point is at $0.000013, where 130.17 trillion SHIB were acquired; a further drop below this threshold could see Shiba Inu plunge past the psychologically significant level of $0.000010.