THE Price of Dogecoin and Shiba Inu collapsed violently today, sparking bearish sentiment among investors. This price drop is due to a recent development involving the new First Lady of the United States, Melania Trump, who launched her meme coin.
Why Dogecoin and Shiba Inu Prices Crashed Violently
CoinMarketCap data shows that the prices of Dogecoin and Shiba Inu have fallen by more than 7% in the last 24 hours. This price drop occurred following Melania Trump’s launch of her coin, “MELANIA”, which sparked a liquidation wave for other coins as investors rushed to accumulate the US first lady meme coin.
Such coin launches are known to suck liquidity from other coins as investors offload their holdings in order to reap quick profits from the new launch. A similar event also happened this weekend. Dogecoin and Shiba Inu prices crashed as new US President Donald Trump launched his ‘TRUMP’ coin.
The launch of “TRUMP” and “MELANIA” also posed a significant risk to the prices of Dogecoin and Shiba Inu, as these coins all fall under the meme coin category. In less than 48 hours, the TRUMP coin then made Shiba Inu the second largest coin by market capitalization and was heavily on Dogecoin’s heels.
Meanwhile, the prices of Dogecoin and Shiba Inu also collapsed due to the decline in Bitcoin prices. The flagship crypto fell from $106,000 to $100,000 on Sunday, dragging down other coins. These same coins were inevitably going to suffer a price drop because they share a strong positive price correlation with BTC.
This price drop undoubtedly represents a huge setback for DOGE in particular, as the top meme coin had reclaimed the crucial $0.40 level as support just before Melania Trump launched her meme coin. Analysts had previously suggested that a recovery to this level could lead to a rise in prices of the leading coin.
Some Positives for Meme Coins
Despite the recent crash, Dogecoin and Shiba Inu prices could soon see a bullish reversal as crypto whales are still accumulating these meme coins. Crypto analyst Ali Martinez revealed that these investors purchased 1.83 billion DOGE over the weekend. This is bullish for Dogecoin, considering how whale accumulation typically precedes a price surge.
IntoTheBlock data suggests that these Dogecoin whales are indeed accumulating as they anticipate a bullish reversal soon enough. DOGE’s big transactions grew by more than 41%, with $23.35 billion traded during this period. Meanwhile, Martinez also provided a bullish outlook for Dogecoin price, stating that the meme coin appears to be in a bullish retest of the breakout zone before advancing further.
Shiba Inu price could also see a bullish reversal, as data from IntoTheBlock shows that large SHIB transactions increased by 145%, with $216.18 million traded in the last 24 hours.
Featured image of Adobe Stock, chart from Tradingview.com