Dogecoin and Shiba Inu prices crashed again after their recent upward trendwhich led to significant price gains. These price crashes are mainly due to the current macro environment and market uncertainty, which do not favor risky assets like these meme coins.
Dogecoin and Shiba Inu Price Crash Amid Market Uncertainty
Dogecoin and Shiba Inu prices have collapsed due to market uncertainty, mainly due to the macro side. The US jobs report released on October 4 suggested that the US economy is healthier than many thought. However, this has raised concerns that the Federal Reserve may no longer be in a hurry to cut interest rates.
The Fed lowered interest rates by 50 basis points (bps) at the FOMC meeting in September, following concerns that the US economy would be heading for a recession if the US Central Bank did not act quickly and implement monetary easing policies. However, this recent jobs report shows that the labor market is solid, contrary to expert opinions.
Given that the US economy is healthier than previously thought, the Fed may not be able to cut rates as expected by markets. The market would have preferred the Fed cuts rates by another 50 basis points November FOMC meetingwhich would have been positive for risky assets like Dogecoin and Shiba Inu.
However, the CME FedWatch data shows that the chances of a 50 basis point rate cut have since fallen to 0% following the release of the jobs report. Instead, the odds are in favor of a rate cut of just 25 basis points. This is not good for Dogecoin and the Shiba Inu price, as investors are likely to lower their risk appetite again if the Fed does not cut rates by 50 basis points as previously anticipated.
Geopolitical tensions and US elections
Geopolitical tensions and the upcoming US elections have also contributed to the price crashes for Dogecoin and Shiba Inu. The The conflict between Israel and Iran has flared up a wave of sell-offs as investors are skeptical about allocating so much capital to these risky assets, considering the impact they could have if escalating tensions in the Middle East escalate into full-blown war.
Israel has threatened to retaliate for Iranian missile attacks on October 1. In line with this, market participants fear that these retaliatory attacks could come at any time.
Meanwhile, the next one US presidential election have also created uncertainty in the market, which has increased further as the November 5 elections approach. Although the Polymarket opportunities currently in favor Donald Trumpwho is pro-crypto, investors choose to stay on the sidelines until after the elections.
That’s why the Dogecoin and Shiba Inu prizes are currently bearish, and these external factors are likely to continue to cast a dark cloud over the market in the short term.
At the time of writing, Dogecoin is trading around $0.107, down over 5% in the past 24 hours, while the Shiba Inu price is trading around $0.000017, down over 7% over this period, according to facts from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com