The memecoin market is facing turbulent times with Dogecoin struggling to stay above the $0.2 mark and Shiba Inu plummeting over 53% since the beginning of the year. Investors are questioning the reasons behind this decline, ranging from alleged manipulation to liquidity shortages and correlation with Bitcoin. Bearish factors are piling up for DOGE and SHIB.
Market data shows a significant drop to lows not seen for several months. This volatility isn’t surprising for speculative assets like Dogecoin and Shiba Inu, but the magnitude of the bearish movement raises questions. Crypto analyst Nobler has stirred controversy by pointing to not just a massive sell-off wave but an orchestrated price manipulation.
According to Nobler, Binance, Wintermute, and BlackRock allegedly sold Bitcoin before the Federal Reserve announcement, for an amount exceeding $1.5 billion. This claim, shared on X, highlights the close correlation between Bitcoin and memecoins. When the king of crypto falters below the $100,000 mark, memecoins mechanically experience selling pressure. Market sentiment then shifts into the red, fueling a downward spiral that’s difficult to stop.
The macroeconomic context also weighs heavily. The Fed’s decisions regarding interest rates directly influence investors’ risk appetite. A monetary tightening traditionally pushes capital toward safe-haven assets, leaving speculative cryptocurrencies like Dogecoin and Shiba Inu on the sidelines.
The market maker Wintermute recently delivered an alarming analysis: liquidity has ceased to flow into the crypto market. This observation explains why the bull run has lost momentum and why Dogecoin and Shiba Inu prices continue to plummet. Without fresh capital injections, the most volatile and speculative assets become the first casualties of the market reversal.
The dynamics of stablecoins constitute a key indicator to gauge market health. When USDT and USDC volumes stagnate or decline, this generally signals a drying up of incoming flows. Similarly, Bitcoin ETFs and Digital Asset Treasuries (DATs) show a pronounced slowdown in their activity. This triple bearish convergence creates an unfavorable environment for memecoins that heavily depend on speculative liquidity.
Companies that had accumulated DOGE earlier in the year, such as CleanCore and Bit Origin, have considerably slowed their purchases. This withdrawal of institutional players, even modest ones, increases pressure on prices. Without support buying from larger hands, resistance to bearish movements quickly erodes.
Doge and Shiba Inu are slowly dying while whales have dumped more than 3 billion DOGE in October. While memecoins are in free fall (-45% for DOGE since September), the Pionex Grid Bot rides the extreme volatility and can generate 40-100% annualized returns on Bitcoin even in a total bear market, without leverage or liquidation risk.
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Santiment data reveals a significant decline in whale transactions for Dogecoin and Shiba Inu. These large wallets, which hold massive quantities of tokens, exert considerable influence on price action. Their withdrawal from the market often signals a lack of conviction about short-term prospects.
Whales typically accumulate during bottom formation periods when prices reach levels deemed attractive. Their current absence suggests that smart money isn’t yet identifying convincing buy signals. This passivity amplifies the structural weakness of memecoins, deprived of the institutional support necessary to reverse the trend.
Trading volume on major platforms confirms this lethargy. Declining volume accompanied by falling prices constitutes a classic bearish technical signal. Technical traders are closely monitoring critical support levels for DOGE around $0.15 and for SHIB near its yearly lows.
Market psychology also plays a decisive role. After periods of euphoria where memecoins multiplied triple-digit gains, holder disappointment translates into apathy. This distribution phase can last several months before a new catalyst revives speculative interest.
Faced with this bearish configuration, investors must adopt a cautious and fact-based approach. Memecoins remain highly speculative assets, subject to sharp variations dictated by market sentiment rather than solid fundamentals. The correlation with Bitcoin remains the dominant factor to watch for anticipating DOGE and SHIB movements.
A return of Bitcoin above $105,000 could be the necessary catalyst to revive interest in altcoins and memecoins. Conversely, a break below $95,000 could trigger a new wave of liquidations, particularly destructive for leveraged positions.
The technical support levels to monitor are at $0.15 for Dogecoin and around $0.000012 for Shiba Inu. A solid defense of these zones could allow for lateral consolidation before a potential recovery. However, breaking below these levels would open the door to new yearly lows.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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