Shiba Inu and Dogecoin Face Price Slump Amid Market Volatility
The cryptocurrency market has grown into a multi-trillion-dollar industry, with millions of tokens available for trading. While this presents significant profit opportunities, the inherent volatility frequently humbles the market with steep declines. Today is one of those days, as the volatility has sent many cryptocurrencies into a downturn, including the two most popular meme coins: Shiba Inu and Dogecoin. Dogecoin’s price has dropped by 5.45%, while Shiba Inu (SHIB) has seen a 3.3% decline.
3 Key Factors Behind the Price Decline of Shiba Inu and Dogecoin
The recent decline in Shiba Inu and Dogecoin has left many in the crypto community puzzled, as both tokens have been bolstered by promising developments. Dogecoin recently announced a roadmap update aiming to increase its block speed by tenfold, and the SHIB community celebrated a massive 2000% surge in its token burn rate. Yet, despite these positive indicators, both tokens are experiencing a drop today. The following three factors are the most likely culprits behind this downturn.
1. Profit-Taking and Capital Rotation
Both DOGE and SHIB are well-established meme tokens with high market caps, dominating their niche in the crypto world. However, with the introduction of new tokens, many investors have started rotating their capital in search of better returns or increased stability in an unpredictable market.
Recently, tokens on the TRON blockchain have gained traction, driven by increasing market hype. A notable example includes one TRON trader reportedly earning $7 million from an initial investment of less than $300. As capital flows into these newer tokens, DOGE and SHIB have seen diminished performance, and without strong bullish catalysts, their prices have fallen further.
2. The September Slump
The overall crypto market has been on a downward trend, with investor sentiment shifting towards caution and fear. Many traders are hesitant to open new positions or take risks during this period of uncertainty. Historically, the crypto market has seen a recurring “September slump,” where prices tend to drop.
A report from Rekt Capital confirmed that Bitcoin had already declined by 6.19% over the past seven days, indicating that the typical September losses are in full swing. Since 2013, Bitcoin has consistently experienced single-digit declines in September, and this trend has carried over into the rest of the altcoin market due to Bitcoin’s dominance.
3. The Bitcoin Price Crash
In line with the broader market trends, Bitcoin has been struggling over the past week. The flagship cryptocurrency is currently priced at $54,252.53, following an 8% weekly drop, although it briefly fell as low as $53,000 earlier today. This has had a ripple effect on the rest of the market, including Dogecoin and Shiba Inu.
As of this writing, Dogecoin is trading at $0.0937, down from a low of $0.0892, while SHIB is priced at $0.00001297, having dropped earlier to $0.00001242. The market-wide downturn can largely be attributed to Bitcoin’s influence, as its price performance often sets the tone for other cryptocurrencies.
Final Thoughts
The ongoing price drop for Shiba Inu and Dogecoin is part of a broader market decline, which has been exacerbated by recent U.S. non-farm payroll data and a sharp sell-off in the U.S. stock market. Additionally, Bitcoin’s poor performance has triggered a chain reaction across the crypto market, contributing to the downturn of altcoins. Finally, the September slump — a recurring phenomenon — has once again played a significant role in the current market weakness, a trend observed in nine of the past twelve years.
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