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Dogecoin (DOGE) is in decline as massive amounts of fear, uncertainty and doubt permeate the market. The reason: On Friday morning, Silicon Valley Bank collapsed as a result of a bank run, setting off the second largest failure of a financial institution in US history.
The collapse of crypto-friendly bank Silvergate triggered a market selloff, with the major meme token’s market cap falling nearly 11% in a 24-hour period. DOGE trading volume is up nearly 30%, suggesting a selloff is imminent.
At the time of writing, Dogecoin is trading at $0.0640 – down 21% in the past seven days. Additionally, data from crypto market tracker Coingecko shows that the meme coin lost 11% of its value in the last 24 hours alone.
The meme token is down 31% over the past 30 days and 24% over the past two weeks – up just 2% since the start of 2023.
Bitcoin – the largest cryptocurrency by market cap – has fallen below $21,000, trading at $20,252 at the time of writing. BTC investors seem to be preparing for the next episode of the ongoing Silicon Valley Bank crisis.
The macroeconomic uncertainty associated with DOGE stems from its highly speculative nature and lack of fundamental value. The price is largely driven by investor and trader demand, making it unpredictable and prone to sudden market swings. Traders believe further losses in the double-digit percentage range are likely.
Silicon Valley Bank: The end also drags DOGE down
However, today’s DOGE price drop can largely be attributed to the sudden collapse of Silicon Valley Bank (SVB).
The demise of the SVB was partly due to sharp increases in interest rates by the Federal Reserve last year.
Banks stocked long-term government bonds, which seemed low risk when interest rates were close to zero. However, when the US Federal Reserve raised interest rates to curb inflation, the value of these assets declined – leading to unrealized losses for the banks.
Despite this, DOGE’s 24-hour trading volume has returned as high as $681M, up 103%, resulting in lively market activity that can easily translate into profits when conditions are right.
Will the SVB eruption affect the launch of Shibarium?
On the other hand, the community of dogecoin competitor Shiba Inu Coin (SHIB) had reason to celebrate as the burn rate of the meme coin increased by a massive 36,497.56%, as reported by Shibburn.
The upcoming release of Shibarium Beta’s Layer 2 blockchain could be the reason for the recent increase in the burn rate.
How that plays out, however, could depend on how bad SVB’s collapse is and how it affects investor sentiment and excitement around the Shibarium launch.
More pain for the crypto market?
Meanwhile, after the failure of Silicon Valley Bank and the proliferation of FUD over hidden risks in finance and banking in general, some market observers are expecting more pain for the crypto sector.
Christopher Whalen, chairman of Whalen Global Advisors, told Reuters:
“There could be blood next week because […] the short sellers are out there and they will attack every single bank, especially the small banks.”
As SHIB continues to provide lively market activity, big names have started dumping their coins, resulting in a decline in the number of whale transactions.
Meanwhile, analysts are keeping an eye on the next developments at Silicon Valley Bank – and how they might affect the price of Dogecoin in the coming days.
Should you buy Dogecoin now?
Current forecasts see Dogecoin on the decline in the short term. However, you can buy Dogecoin today. If you want to bet on promising new meme coins, you could find out more about Love Hate Inu (LHINU): The vote-to-earn token offers the opportunity to vote on a wide variety of topics and earn money like compensation. The project has just started its pre-sale, so there have been no explosive price increases yet. In the current presale, 1 DAY costs 0.000085 USDT, in 6 days the price will increase to 0.00009 USDT.
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Text credit: Bitcoinist
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