Dogecoin (DOGE) and Shiba Inu (SHIB) are currently experiencing a downtrend, highlighting the bearish sentiment towards these meme coins. This price decline is due to several factors, including developments in the broader crypto market.
Dogecoin And Shiba Inu Following Bitcoin’s Path
Dogecoin and Shiba Inu have been following Bitcoin’s path, which explains why they continue to experience this downside pressure. Data from the market intelligence platform IntoTheBlock shows that Dogecoin and Shiba Inu have a price correlation of 0.9 and 0.84, respectively, with Bitcoin, indicating a strong positive price correlation between these meme coins and the flagship crypto.
As such, Dogecoin and Shiba Inu saw their prices spiral as Bitcoin dropped below $56,000 on September 5. Dogecoin dropped to as low as $0.96 on the day, while Shiba Inu dropped to $0.00001309. Bitcoin (and the foremost meme coins) lack any bullish momentum right now and continues to suffer due to macroeconomic factors.
NewsBTC recently reported how the flagship crypto crashed this week as the effects of the Yen carry trade are still in play and that its correlation with the US Stock market has also contributed, with stocks also suffering significant losses this week. These developments have affected the confidence of Dogecoin and Shiba Inu’s investors, seeing how the trading volume for these meme coins has declined.
The drop in trading volume has also caused Dogecoin and Shiba Inu’s prices to decline since investors and traders are less enthusiastic about buying or trading these meme coins at the moment. Data from CoinMarketCap shows that DOGE’s trading volume has dropped by over 3%, while Shiba Inu’s trading volume has declined by 12.86% during this period.
Meanwhile, historical data supports price declines for Dogecoin and Shiba Inu this month, as both meme coins have mostly recorded monthly losses in September over the years. Interestingly, 2021 was the last time Dogecoin and Shiba Inu enjoyed profits in September.
It Could Get Worse For DOGE And SHIB
The bearish sentiment towards Bitcoin price suggests that Dogecoin and Shiba Inu risk further price declines. Crypto analyst Ali Martinez recently predicted that Bitcoin could drop to as low as $40,600 if it fails to hold above the $51,000 support level. Arthur Hayes, the Co-Founder of BitMEX, also mentioned in an X (formerly Twitter) post that Bitcoin is “heavy” and revealed that he believes that the flagship crypto could drop below $50,000 this weekend.
Dogecoin and Shiba Inu are already trading below key support levels at $0.10 and $0.000020, respectively, and could easily suffer a free fall if Bitcoin eventually drops below $50,000. For DOGE, $0.077 will be a price level to watch out for, as 1.22 million addresses bought 23.2 billion DOGE at that price.
Meanwhile, 130.17 trillion SHIB were bought at around $0.000013, and a drop below that level means that Shiba Inu risks dropping below the psychological level of $0.000010.
Featured image created with Dall.E, chart from Tradingview.com
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