Dogecoin is one of several crypto assets that have seen a drop in price today, indicating a bearish overall market. The asset is down less than 10 cents today, trading at $0.09567, a drop of nearly 5% in 24 hours. Amid a general decline in the cryptocurrency and stock markets, Dogecoin has been one of the hardest hit coins. The meme coin has fallen to its lowest level since early February this year, but why is Dogecoin falling?
One of the biggest reasons for Dogecoin's recent decline is its strong correlation with Bitcoin. Like many meme coins and other crypto assets, Dogecoin follows BTC up or down. Bitcoin is far ahead in the crypto space and has the largest market cap in the entire field. Data from market intelligence platform IntoTheBlock shows that Dogecoin's price correlation with Bitcoin is currently 0.95. This is almost the peak of a strong positive correlation between any asset and the leading cryptocurrency.
The entire cryptocurrency market is in the red as Bitcoin plunged 6% today to $54,619.94. Another leading digital asset, Solana SOL, also fell 21% in 24 hours today, further indicating concerns about cryptocurrencies.
More factors that led to the plunge of Dogecoin
In addition, the US economy has also affected the prices of various cryptocurrencies, including Dogecoin. Despite the improvement in inflation, the Federal Reserve has not yet decided whether to cut interest rates. This goes against the predictions of cryptocurrency experts, who originally believed that there was a positive correlation between rate cuts and bull markets. The July employment report also showed that the US economic situation may be worse than many people thought, with the unemployment rate soaring to 4.3%. Even the stock market has faced considerable losses, with more than $2 trillion evaporated from the US stock market in the first hour of trading today.
These factors indicate that the economy is still struggling, which is very negative for the cryptocurrency market. There are many catalysts for Dogecoin’s continued decline, and there aren’t many signs that a rebound is imminent. At best, the asset will continue to remain at current levels and not fall further. However, it may continue to fall to new one-year lows along with Bitcoin. Some analysts may suggest that now is a good time to buy Dogecoin, however, you should be careful and do your research before making this decision to avoid any unnecessary losses.
