Dogecoin and Shiba Inu have experienced a considerable drop in value over the past day, largely influenced by Jerome Powell’s recent remarks. Despite the Federal Reserve declaring a rate reduction of 25 basis points, Powell’s speech cast a shadow over crypto prospects.
### The Reasons Behind the Crash in Dogecoin and Shiba Inu Prices
In the last 24 hours, both Dogecoin and Shiba Inu have witnessed a decline of over 5%. This downturn came soon after the Federal Reserve’s announcement of a 25 basis point rate cut. A key factor contributing to this drop, however, was Fed Chair Jerome Powell’s speech, which signaled continued pessimism for these cryptocurrencies.
Powell indicated that, despite the rate cut, the Fed remains ‘hawkish’. Furthermore, he projected fewer rate cuts in the upcoming years, following the three reductions already made this year. This hawkish stance is not boding well for Dogecoin and Shiba Inu prices, as it breeds skepticism among investors about putting their money into these higher-risk assets.
For Dogecoin, crypto analyst Kevin Capital had previously noted bearish signals in the coin’s technical indicators. He mentioned that these could potentially be offset if the Fed adopted a more supportive stance, which unfortunately did not materialize. This leaves Dogecoin at risk of further decline given its current undesirable fundamentals and technicals.
Additionally, Powell’s remarks on the Strategic Bitcoin Reserve may have also played a role in the dip of Dogecoin and Shiba Inu. The Fed Chair mentioned that the U.S. Central Bank cannot hold Bitcoin and isn’t aiming to change the legislation regarding this. This statement led to Bitcoin’s value falling beneath $100,000.
Since the prices of Dogecoin and Shiba Inu often mirror Bitcoin’s trajectory, it was predictable they’d follow suit as Bitcoin’s value adjusted downwards. Should Bitcoin continue its descent, Dogecoin and Shiba Inu are likely to face additional declines.
### The Path Forward for Dogecoin
Kevin Capital, in a recent social media post, conveyed a short-term downward bias for Dogecoin. He explained that Dogecoin has seen a significant stretch of negative performance, having fallen seven consecutive times without overcoming the Macro .786 Fibonacci level. He also pointed out that DOGE is slipping past the macro .5 Fibonacci on the linear scale.
Kevin further discussed Bitcoin’s situation, noting its potential impact on Dogecoin and Shiba Inu. He observed that Bitcoin is currently facing resistance at the macro 1.703 level and forming a bearish daily pattern, coupled with a considerable amount of downward long-term liquidity.
Nevertheless, the analyst retains optimism that these coins can bounce back. He believes people have overreacted to Powell’s comments, suggesting the market is experiencing a routine correction that investors will eventually buy into.
In summary, while Dogecoin has slipped to $0.36, as depicted in the chart from Tradingview.com, there is still hope that this market correction will lead not to despair, but to opportunity. Nonetheless, a watchful eye on Bitcoin will be essential for predicting Dogecoin and Shiba Inu’s future movements.
