The Shiba Inu and Dogecoin prices has suffered double-digit losses today, after starting the week positively. This price drop has happened thanks to macroeconomic factors, which provide a bearish outlook for these coins.
Why Shiba Inu and Dogecoin prices crashed today
CoinMarketCap data shows Shiba Inu and Dogecoin prices have crashed over 10% today. This development came after the release of JOLTS job vacancies and ISM Services PMI data. The JOLTS vacancies came in stronger than expected, rising to 8.09 million for November 2024.
The ISM Services PMI 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 present a bearish outlook for risk assets like cryptocurrencies, which is why the prices of Shiba Inu and Dogecoin crashed.
With such economic numbers, the US Federal Reserve may feel less motivated to cut interest rates and instead keep them steady. The CME FedWatch data shows that the probability that the Fed will keep interest rates unchanged at the next FOMC meeting increased to 95.2% after the release of this economic data.
The likelihood of the Fed keeping interest rates steady has sparked bearish sentiment among investors, leading to a wave of selling in the crypto market, with Shiba Inu and Dogecoin also caught in the mix. It is worth mentioning that Bitcoin price also dropped from around $101,000 to as low as $96,000 after the release of these economic figures.
As such, Shiba Inu and Dogecoin prices were bound to drop, given their strong positive price correlations to the flagship crypto. These meme coins are still at risk of being resold Bitcoin price suffer more withdrawals.
Some positives for the Meme coins
Despite the recent crash, there are still some positives for Shiba Inu and Dogecoin prices. On the basic side, Donald Trump’s inauguration is fast approaching, with the President-elect of the United States set to take office on January 20th. This provides a bullish outlook for the top memcoins, given Trump’s pro-crypto stance.
Trump recently said interest rates are too high amid rising inflation. This suggests that the President-elect may pressure the Fed to cut interest rates, which is undoubtedly bullish for Shiba Inu and Dogecoin prices. Meanwhile Musk’s Department of Government Efficiency (DOGE) is finally coming to life, which is especially bullish for Dogecoin.
From a technical analysis perspective, cryptanalysts Master Kenobi is provided a bullish outlook for the Dogecoin price, predicting it would reach a new high when Trump takes office. The Shiba Inu price is also expected to follow suit, given the strong price correlation between these meme coins.
Featured image created with Dall.E, charts from Tradingview.com
