Here’s why Dogecoin and Shiba Inu prices crashed violently

The Dogecoin and Shiba Inu prices has plummeted today, triggering a bearish sentiment among investors. This price drop has occurred due to a recent development involving the incoming US First Lady, Melania Trump, who launched her meme coin.

Why Dogecoin and Shiba Inu prices crashed violently

CoinMarketCap data shows that Dogecoin and Shiba Inu prices have fallen over 7% in the last 24 hours. This price drop occurred after Melania Trump’s launch of her meme coin, ‘MELANIA’, which triggered a wave of sales for other coins as investors rushed to accumulate the incoming US first lady’s meme coin.

Such coin launches are known to siphon liquidity from other coins as investors offload their holdings to make quick profits from the new launch. A similar incident also happened over the weekend. Dogecoin and Shiba Inu prices crashed as US President-elect Donald Trump launched his meme coin ‘TRUMP.’

The ‘TRUMP’ and ‘MELANIA’ launch has also posed a major risk to Dogecoin and Shiba Inu prices as these coins all fall under the meme coin category. In less than 48 hours TRUMP meme coin went on to topple Shiba Inu as the second largest meme coin by market cap and was hot on the heels of Dogecoin.

Meanwhile, Dogecoin and Shiba Inu prices also fell due to the Bitcoin price drop. The flagship crypto fell from $106,000 to as low as $100,000 on Sunday, dragging other coins down with it. These meme coins were bound to suffer price drops as well, as they share a strong upside price correlation with BTC.

This price drop undoubtedly represents a major setback for DOGE, especially since the foremost meme coin had regained the crucial $0.40 level as support just before Melania Trump launched her meme coin. Analysts had previously suggested that a recovery of that level could lead to higher prices for the foremost meme coin.

Some positives to the meme coins

Despite the recent crash, Dogecoin and Shiba Inu prices may soon see a bullish turn as crypto whales continue to accumulate these meme coins. Cryptanalyst Ali Martinez revealed that these investors bought 1.83 billion DOGE over the weekend. This is bullish for Dogecoin, considering how whale accumulation usually precedes a price increase.

IntoTheBlock data suggests that these Dogecoin whales are actually accumulating as they expect a bullish turn soon enough. DOGE’s major transactions is up over 41%, with $23.35 billion traded during this period. Meanwhile, Martinez also gave a bullish outlook for the Dogecoin price, saying that the meme coin appears to be in a bullish retest of the breakout zone before going further.

The Shiba Inu price could also be set for a bullish turn as IntoTheBlock data shows that SHIB’s large transactions are up 145%, with $216.18 million traded in the last 24 hours.

Featured image from Adobe Stock, chart from Tradingview.com