Here’s Why The Dogecoin And Shiba Inu Price Crashed Again

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As a seasoned analyst with over two decades of experience navigating the tumultuous waters of global finance, I have seen my fair share of market fluctuations and economic uncertainties. The recent crash in Dogecoin and Shiba Inu prices is no exception to the rule that markets are driven by a complex interplay of factors, both internal and external.

The cost of Dogecoin and Shiba Inu has plummeted once more, reversing their previous surge that resulted in substantial price increases. This latest drop is largely attributed to the present economic climate and market instability, both of which are unfavorable towards risky assets such as meme coins.

Dogecoin And Shiba Inu Price Crash Amid Market Uncertainty

As a researcher, I’ve observed a significant drop in the prices of Dogecoin and Shiba Inu, largely due to uncertainties in the market. The recent US job report released on October 4 hinted at a stronger-than-expected economy, which has fueled speculation that the Federal Reserve might no longer feel the urgency to reduce interest rates. This shift in monetary policy perspective could be contributing to the downturn in these cryptocurrencies’ prices.

At its September FOMC gathering, the Federal Reserve reduced interest rates by 0.5% (or 50 basis points) due to worries that the U.S. economy might be sliding into a recession if prompt action wasn’t taken and a monetary policy easing was not implemented. Yet, this latest employment data suggests that the job market remains robust, contrary to what many experts had predicted.

Given the current state of the U.S. economy is stronger than initially expected, there’s a possibility that the Federal Reserve may not lower interest rates as much as predicted by the markets. The financial market had previously favored a 50 basis point reduction in rates at the Fed’s November FOMC meeting, which could have been beneficial for high-risk assets such as Dogecoin and Shiba Inu.

Contrarily, the data from CME FedWatch now indicates that the probability of a 0.5% rate reduction has fallen to zero following the job report release. Instead, there’s a higher chance of a 0.25% cut in interest rates. This development may not bode well for Dogecoin and Shiba Inu prices, as investors might become more risk-averse if the Fed doesn’t reduce rates by 0.5% as initially anticipated, potentially leading to reduced investment in these cryptocurrencies.

Geopolitical Tensions And US Elections

The geopolitical tension and the approaching U.S. elections have played a role in the recent drops in Dogecoin and Shiba Inu prices. The Israel-Iran conflict has led to a surge of sell-offs, as investors are hesitant to put too much money into these high-risk assets given their potential vulnerability if the escalating Middle Eastern tensions lead to an all-out war.

As a researcher, I’m closely monitoring the situation following Iran’s missile strikes against Israel on October 1st. Israel has made it clear they will respond, and this has left me and other market participants on edge, as we anticipate potential retaliatory attacks could occur at any moment.

As the U.S. presidential elections approach, particularly on November 5, there’s growing uncertainty in the market. While Polymarket predictions lean towards a win for Donald Trump, who supports cryptocurrency, investors are hesitant to jump in, preferring to wait until after the election before making any moves.

Consequently, it appears that the prices for Dogecoin and Shiba Inu are on a downtrend at present, with these external elements potentially prolonging this gloomy situation in the immediate future.

Currently, Dogecoin stands at approximately $0.107 per coin, having dropped by more than 5% in the last 24 hours. In contrast, Shiba Inu is trading around $0.000017, experiencing a decline of over 7% within this time frame, as reported by CoinMarketCap data.

Here’s Why The Dogecoin And Shiba Inu Price Crashed Again

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2024-10-08 19:11