Dogecoin and Shiba Inu prices took a major hit recently, leaving investors feeling gloomy. Let’s break down why.
The Melania Trump Effect
The main culprit? Melania Trump’s new meme coin, “MELANIA.” Its launch caused a sell-off as investors scrambled to get in on the action, pulling money away from other coins like Dogecoin and Shiba Inu. This isn’t new; a similar thing happened when Donald Trump launched his own meme coin, “TRUMP,” a few days earlier. Both coin launches created a liquidity drain, as people sold existing holdings to buy the new ones. This is especially impactful because Dogecoin and Shiba Inu are also meme coins, putting them in direct competition. The “TRUMP” coin even briefly became the second-largest meme coin by market cap, surpassing Shiba Inu.
Bitcoin’s Influence
The drop in Bitcoin’s price also played a role. When Bitcoin fell, it dragged other cryptocurrencies down with it, including Dogecoin and Shiba Inu, which tend to move in the same direction as Bitcoin.
Dogecoin’s Setback
This crash was especially tough on Dogecoin. It had just regained a key support level ($0.40) before the Melania Trump coin launch, and analysts believed this could signal further price increases. This recent drop reversed that progress.
A Glimmer of Hope?
Despite the downturn, there’s some reason for optimism. Data suggests that large investors (whales) are accumulating both Dogecoin and Shiba Inu. This often precedes a price surge. For Dogecoin, large transactions are up over 41%, with $23.35 billion traded recently. For Shiba Inu, large transactions increased by a whopping 145%, with $216.18 million traded. Analysts are even suggesting a potential bullish reversal for both coins.
