Bitrabo Editorial
In the past day, Dogecoin (DOGE) has witnessed a significant drop, aligning with the broader downtrend across the cryptocurrency market. This plunge has brought the popular meme coin to price levels last seen in February of this year.
Factors Behind the Dogecoin Price Decline
The primary reason behind Dogecoin’s price crash is its exceptionally strong positive price correlation with Bitcoin. Data from IntoTheBlock indicates that Dogecoin’s correlation with Bitcoin currently stands at 0.95, nearing the maximum level of correlation any asset can have with the leading cryptocurrency.
Consequently, Dogecoin has mirrored Bitcoin’s trajectory, given that Bitcoin has slid by more than 11% in the past 24 hours, reaching price points not witnessed since the start of the year. The downturn in both Bitcoin and Dogecoin can be attributed to prevailing macroeconomic conditions in the US and globally.
The recent US job report revealing a higher-than-anticipated unemployment rate of 4.3% has raised concerns among cryptocurrency traders. This situation implies that risk assets like Dogecoin might face increased vulnerability if economic conditions worsen.
Further exacerbating the situation, the Federal Reserve’s delay in reducing interest rates has dampened the optimistic outlook among crypto investors. Previous projections of interest rate cuts have not materialized, with higher interest rates being detrimental to the crypto market’s performance as investors have reduced discretionary spending on such risky assets like Dogecoin.
Moreover, the Bank of Japan’s decision to raise its benchmark interest rate recently has had a ripple effect, negatively impacting both Bitcoin and Dogecoin prices. The significant decline in Japan’s Nikkei following the interest rate hike seems to have influenced the US stock and crypto markets as well.
Is It a Time to Consider Buying the Dip?
Crypto analyst Crypto Kaleo has described the recent price decline of Dogecoin as a prime ‘buy the dip’ opportunity, forecasting that the meme coin could still surge to $1 later in the current bullish phase. Despite the current perceived pain in the market, Kaleo views Dogecoin’s price dip as a beneficial chance for investors.
With potential further downturns anticipated, Crypto Kaleo has suggested that Dogecoin might drop to as low as $0.07. He reassures investors that beyond this threshold, the pain will subside, urging them to exercise patience as Dogecoin steadily progresses towards the $1 mark in the coming months.
Currently, Dogecoin is trading around $0.08, marking a decrease of over 21% in the past 24 hours, according to CoinMarketCap.