Emily Walker
In the past day, the prices of Dogecoin and Shiba Inu have experienced a notable decline. This downturn comes in the wake of a speech by Jerome Powell, which conveyed a pessimistic outlook for crypto assets, overshadowing the recently announced 25 basis point (bps) rate cut.
Reasons Behind the Decline in Dogecoin and Shiba Inu Prices
Both Dogecoin and Shiba Inu are currently down by more than 5% in the last 24 hours, despite the Federal Reserve’s rate cut announcement. The major factor contributing to this drop is the message from Fed Chair Jerome Powell, which was interpreted as negative for cryptocurrency investments.
During his speech, Powell indicated that the Fed remains ‘hawkish’ even after the rate cut, implying fewer rate reductions in the upcoming year after three cuts this year. This hawkish stance tends to deter investors from riskier assets like Dogecoin and Shiba Inu.
Crypto analyst Kevin Capital has pointed out that Dogecoin’s technical indicators are bearish at present. He mentioned that these indicators could reverse if the Federal Reserve adopts a more dovish approach, which has not occurred, suggesting that Dogecoin might face additional declines as both technical and fundamental indicators remain negative.
Additionally, Powell’s comments regarding the Strategic Bitcoin Reserve have likely contributed to the falling prices of Dogecoin and Shiba Inu. He reiterated that the US Central Bank cannot hold Bitcoin and does not plan to change this policy, leading to a decrease in Bitcoin’s price below the $100,000 mark. Since Dogecoin and Shiba Inu typically follow Bitcoin’s trend, their prices are also vulnerable to further drops if Bitcoin continues to slide.
Future Predictions for DOGE
Kevin Capital recently shared on X that the short-term outlook for Dogecoin’s price is leaning negative. He noted that Dogecoin has faced seven consecutive bearish candles and has struggled to surpass the Macro .786 Fibonacci level. Moreover, it seems to be breaking below the macro .5 Fibonacci level on the linear chart.
He also highlighted the importance of Bitcoin‘s movements in relation to the trends of Dogecoin and Shiba Inu. Kevin mentioned that Bitcoin is currently facing resistance at the macro 1.703 level and is producing bearish daily candles while having substantial long liquidity that could lead to further declines.
Despite these challenges, the analyst remains optimistic, suggesting that the current reactions to Powell’s speech may be overly dramatic and that investors will likely seize the opportunity to buy during this dip, viewing it as a typical market correction.