As of 11:31 a.m. ET today, Dogecoin ( DOGE -7.30%) has dropped about 4.5% since yesterday afternoon. There isn’t a clear explanation for this decline, but it could be linked to fresh economic data released this morning that points to a robust economy.
Why positive news can have negative effects
For the week ending Sept. 20, weekly jobless claims totaled 218,000 after seasonal adjustments, which is 14,000 fewer than the previous week and below the forecast of 235,000. Jobless claims represent the number of people applying for unemployment benefits for the first time.
Image source: Getty Images.
On top of that, the U.S. Commerce Department issued its final second-quarter gross domestic product (GDP) estimate, revising it up by 0.5 percentage points to 3.8% thanks to increased consumer spending. This marks the strongest quarterly result in more than two years.
“The US economy continues to show strength, and the solid GDP figure further demonstrates that a recession is unlikely, even as job growth slows,” wrote Paul Stanley, chief investment officer at Granite Bay Wealth Management, in a recent research note cited by CNN.
Although these figures are positive for the economy, they could prompt the Federal Reserve to take a more aggressive stance on interest rates. Cryptocurrencies, however, generally see better performance when interest rates are falling.
Monetary policy’s major impact on crypto
During the Fed’s latest meeting, investors were caught off guard when most officials projected only a single rate cut in 2026. With more evidence of economic strength, the Fed has less incentive to implement significant rate reductions. This could dampen optimism in the crypto sector, which has been hoping for a longer period of rate cuts.
Regarding Dogecoin specifically, I remain uninterested in the token because it lacks practical, real-world applications.
