The Shiba Inu and Dogecoin prices suffered double-digit losses today after starting the week on a positive note. This price drop is due to macroeconomic factors that present a bearish outlook for these coins.
Why Shiba Inu and Dogecoin prices crashed today
Data from CoinMarketCap shows that Shiba Inu and Dogecoin prices have plunged by over 10% today. This development comes after the release of JOLTS job vacancies and ISM Services PMI data. The JOLTS job offers was stronger than expected and rose to 8.09 million in November 2024.
The ISM Services Purchasing Managers’ Index also came in stronger than expected, rising to 54.1% in December, marking the sixth month of expansion. While these numbers suggest that the US economy is healthy, they represent a bearish outlook for risk assets like cryptocurrencies, which is why Shiba Inu and Dogecoin prices plummeted.
Given these economic numbers, the Federal Reserve may be less motivated to cut interest rates Interest rates and keep them quiet instead. The CME FedWatch data shows that the likelihood of the Fed leaving interest rates unchanged at its next FOMC meeting increased to 95.2% following the release of these economic data.
The likelihood of the Fed keeping interest rates stable has sparked bearish sentiment among investors, leading to a wave of sell-offs in the crypto market Shiba Inu and Dogecoin also caught in the mix. It is worth mentioning that after the release of these economic figures, the Bitcoin price also fell from around $101,000 to as low as $96,000.
Therefore, Shiba Inu and Dogecoin prices were forced to decline due to their strong positive price correlation with the flagship cryptocurrency. These meme coins are still at risk of further sell-offs if the Bitcoin price suffers more setbacks.
Some positive aspects of meme coins
Despite the recent crash, there are still some positives for Shiba Inu and Dogecoin prices. On the fundamental side, Inauguration of Donald Trump is getting closer as the US President-elect will take office on January 20th. Given Trump’s pro-crypto stance, the outlook for the major meme coins is optimistic.
Trump recently stated that interest rates are too high given rising inflation. This suggests that the new president could pressure the Fed to cut interest rates, which is undoubtedly bullish for Shiba Inu and Dogecoin prices. Meanwhile Musks Ministry of Government Efficiency (DOGE) is finally coming to life, which is particularly positive for Dogecoin.
From a technical analysis perspective: Crypto Analyst Master Kenobi saw to it an optimistic outlook for Dogecoin price, predicting that it would reach a new high after Trump takes office. Given the strong price correlation between these meme coins, Shiba Inu price is also expected to follow suit.
Featured image created with Dall.E, chart from Tradingview.com