This week, meme coins like Dogecoin and Shiba Inu have seen a sharp decline in their market values, leading to widespread concern among investors. This downturn coincides with ongoing geopolitical instabilities, notably the conflict in the Middle East, which has impacted global market sentiment significantly.
Factors Contributing to the Decline in Dogecoin and Shiba Inu Prices
Recent statistics from CoinMarketCap indicate that the Dogecoin and Shiba Inu cryptocurrencies have experienced noticeable losses over the past week. The most significant drop was seen on June 13, triggered by escalating military actions between Israel and Iran, resulting in increased anxiety in the financial markets.
On the same day, Iran’s retaliation to Israeli actions intensified fears of a wider military conflict. Reports of explosions and military exchanges have heightened the risk assessment among investors, which has further pressured both Dogecoin and Shiba Inu.
Additionally, rising oil prices linked to the ongoing conflict are exacerbating concerns. High oil prices can trigger inflationary pressures, compelling the U.S. Federal Reserve to consider tightening monetary policy. Such measures reduce the flow of liquidity in markets, thereby negatively influencing the performance of both Dogecoin and Shiba Inu.
As a result of this downturn, Coinglass data reveals that open interest in Dogecoin has decreased by over 2%, nearing levels last seen in late 2024 following a significant price retracement. Additionally, the derivatives trading volume has plummeted by 37%, showing waning interest from traders, many of whom are opting to short Dogecoin with a long-to-short ratio of 0.9.
Shiba Inu’s market dynamics appear similarly negative, according to CoinGlass. The derivatives trading volume has dropped more than 38% to $173 million, indicating a bearish sentiment. However, open interest has seen a slight increase of nearly 1%, now at $142 million, suggesting a mixed outlook amidst the prevailing bearish sentiment.
Potential for Recovery in DOGE and SHIB Prices
Despite the current bearish trend, crypto analyst Trader Tardigrade has suggested that Dogecoin may be nearing a price bottom. In a recent post on social media, he indicated that Dogecoin might be completing a corrective phase, with potential for a significant uptrend ahead. His analysis posits that Dogecoin could see a rally surpassing $0.65 if the anticipated upward movement occurs.
Similarly, analyst InvestingHaven has provided insights on Shiba Inu’s market position. In a recent post on social media, he emphasized that Shiba Inu has maintained a critical support level of $0.000012345 during turbulent market conditions. Notably, signs suggest a potential W-reversal pattern, which, if confirmed, could propel SHIB’s price to approximately $0.0000666.
