Both Dogecoin (DOGE) and Shiba Inu (SHIB) have seen their prices drop by more than 10% in the past week. The downward trend in these meme coins can be attributed to broader market conditions that have left many crypto investors uncertain.
Impact of the US Federal Reserve’s Stance
The recent decline in Dogecoin and Shiba Inu prices is thought to be linked to the US Federal Reserve’s position on interest rates. Although the Consumer Price Index (CPI) showed lower-than-expected inflation figures, which initially benefited the crypto market, Fed Chair Jerome Powell’s comments indicating a reluctance to cut interest rates had a negative impact.
Following the decision to keep interest rates unchanged at 5.25% to 5.5%, investor confidence in high-risk assets like cryptocurrencies waned. This sentiment shift led to a downturn in the crypto market, with Bitcoin, in particular, experiencing a drop from $70,000 to $66,000.
Investors have shown a preference for utility tokens over meme coins like Dogecoin and Shiba Inu amid concerns about stable interest rates for the rest of the year. Additionally, data from IntoTheBlock suggests that meme coins still closely follow Bitcoin’s price movements, contributing to their recent decline.
Shiba Inu’s price decrease can also be attributed to significant selling pressure, evidenced by reports of Shiba Inu whales transferring a large number of tokens to Coinbase, indicating potential sell-offs in the near future.
Expectations of a Potential Recovery
Crypto analysts have noted that Dogecoin and Shiba Inu could see a rebound in their prices. CrediBULL Crypto mentioned that Dogecoin had reached a critical juncture and could benefit from a price reversal if Bitcoin were to rally. Similarly, analyst Kevin highlighted positive indicators on Dogecoin’s chart, suggesting an upcoming bullish trend for the meme coin.
Despite the selling pressure on Shiba Inu, its fundamental factors indicate a positive outlook, with data from Shibburn showing a significant spike in burn rate over a 24-hour period, hinting at a potential price recovery in the near future.
