The cryptocurrency market has witnessed a notable decline in the prices of popular meme coins Shiba Inu (SHIB) and Dogecoin (DOGE). Over the last 24 hours, SHIB has decreased by 3.72% and is now valued at $0.000016, while DOGE has fallen by 2.5% and is currently priced at $0.106.
Additionally, the trading volumes for both coins have also seen significant shifts, with SHIB’s volume down by 3.82% to $286.78 million and DOGE experiencing a surge in trading volume by 16.41% to $637.79 million. The following sections explore three major reasons contributing to the price decline of these meme coins.
Increased Whale Activity in Shiba Inu
Recent data indicates that Shiba Inu whales have significantly increased their trading activity, raising concerns among smaller investors. Between October 6 and 7, the volume of SHIB transactions involving whales more than doubled, reaching 3.02 trillion SHIB worth approximately $52.8 million.
This uptick in whale activity, combined with the overall price decline, suggests that large holders may be leading the sell-offs. As these substantial holders liquidate portions of their investments, the selling pressure has the potential to influence market sentiment negatively.
Additionally, the increase in transactions involving large amounts of SHIB highlights a growing trend among whales to capitalize on the current market volatility. With many of these transactions surpassing $100,000, whales’ participation in the market could exacerbate the downward pressure on SHIB price. This scenario places small investors in a risky position, as their holdings may depreciate further amid the prevailing bearish sentiment.
Technical Analysis Signals Bearish Trends
The technical indicators for both Shiba Inu and Dogecoin reflect bearish trends that may have contributed to the recent price declines. More so, SHIB price daily chart has formed a symmetrical triangle pattern, indicative of a consolidation phase.
Source: TradingView
While symmetrical triangles can break in either direction, a breakout from this pattern could lead to significant price movements. Currently, the price remains near the lower end of the triangle, and if a surge in selling pressure occurs, SHIB could retest lower support levels at approximately $0.000015 and $0.000013.
For Dogecoin, technical analysis suggests it is in a corrective phase, with the Elliott Wave structure indicating a potential retracement before the next rally. DOGE is trading below its 200-day moving average, reinforcing the prevailing downtrend.
The Wave Oscillator also shows bearish momentum, further supporting that DOGE price may not see a reversal shortly. The sentiment surrounding both SHIB and DOGE remains cautious, with traders wary of potential further declines.
Broader Crypto Market Sentiment and Economic Factors
Market sentiment plays a crucial role in the performance of cryptocurrencies, and recent trends indicate a bearish outlook among investors. Broader economic factors and fluctuations in the crypto market have influenced SHIB and DOGE.
For instance, the recent movement of ETH tied to the PlusToken scam has sparked concerns of a potential crypto sell-off, with 7,000 ETH worth $16.7 million already transferred to exchanges. The possibility of a $1.3 billion liquidation adds pressure on the crypto market.
Additionally, with a significant number of investors in profit, approximately 52.86% of SHIB holders are “in the money,” there is a psychological factor at play. As these holders consider their options, a shift in sentiment can prompt profit-taking behaviors.
However, by October’s end, Dogecoin price could break out of its bearish pattern, potentially reaching $0.15. Whale accumulation has surged, with wallets holding between 1 million to 10 million DOGE now controlling 10.63 billion DOGE. This strong buying interest suggests confidence in an upward price move.
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