The cryptocurrency market has witnessed notable drops in the prices of popular meme coins Shiba Inu (SHIB) and Dogecoin (DOGE). In the past 24 hours, SHIB has fallen by 3.72% and is currently valued at $0.000016, while DOGE has fallen by 2.5% and is currently priced at $0.106.
In addition, the trading volumes of both coins also changed significantly, with SHIB’s trading volume falling by 3.82% to $286.78 million, while DOGE’s trading volume surged by 16.41% to $637.79 million. The following section explores three main reasons for the price decline of these meme tokens.
Shiba Inu whale activity increases
Recent data shows a significant increase in Shiba Inu Whale trading activity, sparking concerns among small investors. Between October 6 and 7, SHIB trading volume involving Shiba Inu whales more than doubled to 3.02 trillion SHIB, worth approximately $52.8 million.
The increase in whale activity, combined with the overall price decline, suggests that large shareholders may be leading the sell-off. As these large shareholders liquidate part of their investments, the selling pressure could have a negative impact on market sentiment.
In addition, the increase in transactions involving large amounts of SHIB highlights the growing trend of whales taking advantage of the current market volatility to profit. As many of these transactions were for amounts exceeding $100,000, the participation of whales in the market could exacerbate downward pressure on SHIB prices. This situation puts small investors in a dangerous position as their holdings could further depreciate amid the prevailing bearish sentiment.
Technical analysis shows a bearish trend
Both Shiba Inu and Dogecoin’s technical indicators reflect a bearish trend, which may have contributed to the recent price decline. Moreover, the SHIB price daily chart has formed a symmetrical triangle pattern, suggesting a consolidation phase.
While the symmetrical triangle can break out in either direction, a breakout of this pattern could result in significant price volatility. Currently, the price remains close to the lower end of the triangle and if the selling pressure surges, SHIB could retest the lower support levels at around $0.000015 and $0.000013.
For Dogecoin, technical analysis suggests that it is in a correction phase, with the Elliott Wave structure suggesting a retracement is likely before the next rally. Dogecoin is trading below its 200-day moving average, reinforcing the current downtrend.
The Wave Oscillator is also showing bearish momentum, further supporting the view that DOGE price may not see a reversal anytime soon. Sentiment around SHIB and DOGE remains cautious, with traders fearing that further declines are possible.
Broader crypto market sentiment and economic factors
Market sentiment is crucial to the performance of cryptocurrencies, and recent trends suggest a bearish outlook among investors. Broader economic factors and volatility in the crypto market have impacted SHIB and DOGE.
For example, recent ETH movements related to the PlusToken scam have sparked concerns about a potential sell-off in crypto, with 7,000 ETH worth $16.7 million having moved to exchanges. The possibility of a $1.3 billion liquidation has added pressure on cryptocurrency markets.
Additionally, there is a psychological factor as a large number of investors are taking profits, with approximately 52.86% of SHIB holders in a “profit” position. The shift in sentiment could trigger profit-taking behavior as these holders consider their options.
However, by the end of October, the price of Dogecoin may break out of the bearish pattern and may reach $0.15. Whale hoarding has surged, and wallets holding 1 million to 10 million Dogecoins now control 10.63 billion Dogecoins. This strong buying interest shows that people are confident that the price will rise.
