Dogecoin and Shiba Inu prices took a significant hit recently, dropping over 5% in just 24 hours. This unexpected crash happened despite the Federal Reserve cutting interest rates. So what gives?
The Fed’s Hawkish Stance
A big reason for the downturn was Fed Chair Jerome Powell’s speech. While the Fed did cut rates, Powell’s comments painted a less-than-optimistic picture for crypto. He hinted that the Fed’s approach remains “hawkish,” suggesting fewer rate cuts in the future. This cautious outlook made investors nervous about riskier assets like Dogecoin and Shiba Inu.
Technical Indicators and Bitcoin’s Influence
Crypto analyst Kevin Capital pointed out that Dogecoin’s technical indicators were already bearish before Powell’s speech. The Fed’s less-dovish-than-expected stance only worsened the situation.
The situation was further complicated by Powell’s comments on Bitcoin. He stated that the US central bank isn’t allowed to hold Bitcoin and isn’t looking to change that. This news sent Bitcoin’s price tumbling, and since Dogecoin and Shiba Inu often move in the same direction as Bitcoin, they followed suit.
Dogecoin’s Future: A Short-Term Dip?
Kevin Capital believes Dogecoin’s short-term outlook is bearish. He noted several concerning technical indicators. However, he remains optimistic in the long run, suggesting that the current dip is a normal market correction and that the recent sell-off is an overreaction to Powell’s speech. He expects buyers to step in soon. The impact of Bitcoin’s price on Dogecoin and Shiba Inu remains a key factor to watch.
