Dogecoin (DOGE) and Shiba Inu (SHIB) have both seen declines of more than 10% this week. The downturn in these meme coins is attributed to broader macroeconomic factors that have raised concerns among crypto investors.

The US Federal Reserve’s Hawkish Stance Casts Uncertainty

The recent decline in Dogecoin and Shiba Inu is largely attributed to the US Federal Reserve's stance on interest rates. Although the Consumer Price Index (CPI) inflation data was lower than expected, initially boosting the crypto market, Federal Reserve Chair Jerome Powell's subsequent comments indicated a hawkish stance. Powell suggested that the Fed was not yet considering interest rate cuts, following its decision to maintain rates between 5.25% and 5.5%. This has diminished investor confidence in risk assets like cryptocurrencies. Bitcoin, the flagship crypto, declined from approximately $70,000 to $66,000 following Powell's remarks.

Dogecoin and Shiba Inu have borne the brunt of this shift, as investors are now more inclined towards utility tokens over meme coins amid concerns about stable interest rates throughout the year. Additionally, data from IntoTheBlock reveals that these leading meme coins continue to correlate closely with Bitcoin’s price, contributing to their significant decline alongside the flagship crypto.

Shiba Inu's drop can also be attributed to substantial selling pressure recently observed in the meme coin market. Reports indicate that Shiba Inu whales transferred 4.29 trillion tokens to Coinbase, indicating a potential intention to sell off their holdings in the near term.

Expectations for Dogecoin and Shiba Inu Recovery

Crypto analysts like CrediBULL Crypto have noted that Dogecoin has reached a critical juncture, describing it as a potential turning point. They believe that if Bitcoin shows signs of recovery, Dogecoin could rebound as well.

Meanwhile, analyst Kevin (formerly Yomi OG) has pointed out positive indicators in Dogecoin’s chart, such as the recent green flip on the 12-day Gaussian channel, suggesting a bullish trend ahead.

Despite the recent selling pressure, Shiba Inu’s fundamental metrics remain positive, indicating a potential price recovery in the near future. Shibburn data shows a significant increase of over 863% in Shiba Inu's burn rate over the last 24 hours, which could support a bullish outlook.