Why Dogecoin Is Plummeting Today
Key Points
Dogecoin is sinking even though the Federal Reserve cut interest rates yesterday.
Fed Chair Jerome Powell indicated that the FOMC might not cut rates again in December.
U.S.-China trade news could also be spurring sell-offs for Dogecoin.
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Dogecoin (CRYPTO: DOGE) is seeing a significant valuation contraction in Thursday's trading. As of 3:30 p.m. ET, the cryptocurrency's token price had fallen 8.4% over the previous 24 hours of trading. Across the same stretch, Bitcoin had dipped 3.7% and Ethereum was down 5.4%.
Dogecoin is getting hit with sell-offs on following commentary from the latest Federal Reserve meeting. News surrounding the U.S.'s trade negotiations with China may also be a significant factor in the pullback.
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Dogecoin sinks on interest rate news
The Federal Reserve met yesterday and announced that its Federal Open Market Committee had voted to cut the U.S. benchmark interest rate by a quarter-point. Typically, rate cuts would be a bullish catalyst for Dogecoin and other cryptocurrencies -- but investors already largely expected that the Fed would issue a cut yesterday. Additionally, Fed Chair Jerome Powell stated that a cut at the central bank's December meeting was not a "foregone conclusion" and highlighted inflationary pressures and other stressors facing the U.S. economy.
Is Nvidia-related news causing sell-offs for Dogecoin?
President Donald Trump is meeting with Chinese President Xi Jinping in South Korea to discuss trade and other issues, and developments surrounding the meeting could be prompting sell-offs for Dogecoin. Trump said that he had not discussed lifting restrictions on the exports of Nvidia's Blackwell processors to China -- raising concerns that a potentially forthcoming trade deal could be make less progress than anticipated.
If tariffs come down less than expected, it could mean that inflationary pressures remain higher for longer. If so, that could mean that the Fed has a tougher path to cutting rates -- and that Dogecoin and other cryptocurrencies face a less bullish trading backdrop.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Nvidia. The Motley Fool has a disclosure policy.
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