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Dogecoin and Shiba Inu prices have crashed again following their recent upward trend, which led to significant price gains. These price crashes are primarily due to the current macro environment and market uncertainty, which don’t favor risk assets like these meme coins.
Dogecoin And Shiba Inu Price Crash Amid Market Uncertainty
Dogecoin and Shiba Inu prices have crashed amid market uncertainty, thanks primarily to the macro side. The US job report released on October 4 suggested that the US economy is healthier than many imagined. However, this has raised concerns that the Federal Reserve might no longer be in a hurry to cut interest rates.
The Fed cut interest rates by 50 basis points (bps) at its September FOMC meeting following concerns that the US economy might be heading into a recession if the US Central Bank didn’t act fast and implement a monetary easing policy. However, this recent job report showed that the labor market is solid, contrary to experts’ opinions.
Considering that the US economy is healthier than earlier imagined, the Fed might not cut rates as anticipated by the markets. The market had favored the Fed cutting rates by an additional 50 bps at its November FOMC meeting, which would have been positive for risk assets like Dogecoin and Shiba Inu.
However, the CME FedWatch data shows that the odds for a 50 bps rate cut have since dropped to 0% following the release of the job report. Instead, the odds favor only a 25 bps rate cut. This isn’t favorable for Dogecoin and the Shiba Inu price, as investors are likely to lower their risk appetite once more if the Fed doesn’t cut interest rates by 50 bps as earlier envisaged.
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 Isreal-Iran conflict has sparked a wave of sell-offs as investors are skeptical about allocating so much capital to these risk assets, considering how much they could be affected if the rising tensions in the Middle East become a full-blown war.
Israel has threatened that it would retaliate for the Iranian missile strikes on October 1. In line with this, market participants are apprehensive that these retaliatory attacks could come at any moment.
Meanwhile, the upcoming US presidential elections have also brought market uncertainty, further heightened with the November 5 election drawing nearer. Although the Polymarket odds currently favor Donald Trump, who is pro-crypto, investors are choosing to remain on the sidelines until after the elections.
Therefore, the Dogecoin and Shiba Inu prices are currently bearish, and these external factors will likely continue to cast a dark cloud over the market in the short term.
At the time of writing, Dogecoin is trading at around $0.107, down over 5% in the last 24 hours, while the Shiba Inu price is trading at around $0.000017, down over 7% during this period, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
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