Why Is Dogecoin (DOGE) Price Falling Today?

Dogecoin (DOGE) price declined by more than 6% today, extending its previous downtrend.

DOGE token price is trading at $0.3631 and the market cap is standing at $53.46 billion. 

The crypto market is down today due to the Fed’s interest rate cut decision at a recent meeting. Bitcoin briefly plunged below the $100,000 mark and is now trading at around the $101,341 price range whereas Ether’s price decreased by 4% in the last 24 hours. Other altcoins such as XRP, BNB, Solana, and Dogecoin are also dropping, making investors wonder whether the bull rally ended before the new year. 

Dogecoin (DOGE) price has already been falling for the past one month, irrespective of what is happening in the broader crypto market. With the recent Federal Reserves decision to cut interest rates by 25 bps and its influence on the crypto market to cause price falls has made the DOGE price to further plunge today. 

Dogecoin fell from around the $0.39 price range to as low as $0.3432 a few hours after the US Fed meeting. It is trading at around $0.3629, with around 6% decrease in the last 24 hours. Even though the trading volume is increasing by 58%, hovering around $6.5 billion, the market cap decreased by over 5% and is standing in the $53.42 billion range. 

Factors Leading to Dogecoin (DOGE) Price Decline

The US Federal Reserve (Fed) announced an interest rate cut by 25 bps, which resulted in a lowered fund rate to 4.25 to 4.50% range in its recent meeting on Wednesday. Adding to that, Jerome Powell clearly stated that they are not allowed to own Bitcoin and they are also not interested in changing laws at Fed. 

Jerome Powell’s statements in the middle of a crypto bull run had influenced market prices to a large extent. Within a few hours, major cryptocurrencies including BTC, ETH, XRP, SOL, etc started falling. Dogecoin, which was already on a downtrend, also started to plunge further today. 

Keeping the Fed impact aside, DOGE price was already on a downward trend for the last 30 days. The transaction volume of Dogecoin is also decreasing significantly along with its daily active addresses. According to Santiment, the daily active addresses reached 1.64 million in the last week of November, decreased to the 70k range this week. 

The Dogecoin Vulnerability Leading to Network Crash

The major reason behind the decreasing price trend of DOGE is Dogecoin crash, when a hacker exploited a critical vulnerability in its network. It’s been around a week since the hack took place and resulted in 69% of Dogecoin nodes crashing. 

The hack was carried out by Bitcoin sidechain Sequentia co-founder Andreas Kohl, while the vulnerability was discovered by Tobias Ruck. Coinbase reported the crash was less severe and the researcher Tobias Ruck was rewarded with $200. 

The revelation of the network vulnerability, combined with decreasing transaction volume and market sentiment, along with the Fed’s impact on the overall crypto market have resulted in a further price decline of Dogecoin. 

The DOGE token price impacts other memecoins, similar to how Bitcoin price impacts other altcoins. Following the suit of downward price trend, other memecoins have also started decreasing, allowing DOGE to maintain its position as the top memecoin. Once the bull run returns, the tables could turn and we could see a trend reversal in the Dogecoin price. 

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