Bitrabo Editorial
The prices of Dogecoin and Shiba Inu have dropped once more, reversing their recent gains. This decline can largely be attributed to the current economic conditions and market apprehension, which do not favor speculative assets like these popular meme coins.
Price Decline for Dogecoin and Shiba Inu Amid Market Instability
The recent downturn in Dogecoin and Shiba Inu prices is closely linked to the current market instability. A job report released on October 4 indicated a stronger-than-expected US economy, raising worries that the Federal Reserve may not proceed with its plans to lower interest rates.
In September, the Federal Reserve reduced interest rates by 50 basis points (bps) due to fears that the US economy might be sliding into recession without prompt monetary policy adjustments. The latest job report, however, contradicted those fears by suggesting a robust job market.
As the economic outlook improves, there’s a possibility that the Fed will refrain from further rate cuts that markets had anticipated. The market had expected an additional rate cut of 50 bps at the November meeting, which would have supported riskier assets such as Dogecoin and Shiba Inu.
Nonetheless, according to the CME FedWatch data, the likelihood of a 50 bps cut has decreased to 0% following the job report. The current outlook now favors only a 25 bps cut, which is not reassuring for Dogecoin and Shiba Inu, as investors may further retreat from taking risks if the anticipated cuts do not materialize.
Influence of Geopolitical Strains and US Elections
Geopolitical issues and the imminent US elections have added to the downward pressures on Dogecoin and Shiba Inu. The ongoing tensions between Israel and Iran have triggered large sell-offs; investors are hesitant to commit funds to such volatile assets amid concerns of potential escalation in the Middle East.
Israel has signaled intentions to respond to Iran’s missile attacks from October 1, creating unease among market players about possible immediate retaliatory actions.
Additionally, the upcoming US presidential elections, with November 5 approaching, have further heightened market uncertainty. Although the Polymarket odds seem to favor Donald Trump, known for his pro-crypto stance, many investors are opting to stay cautious until after the elections.
As a result, both Dogecoin and Shiba Inu are experiencing a bearish trend, and these broader factors are expected to continue affecting the market negatively in the near future.
Currently, Dogecoin is valued at approximately $0.107, reflecting a decrease of over 5% in the past 24 hours, while Shiba Inu is priced around $0.000017, down more than 7% during the same period, according to CoinMarketCap data.