Dogecoin (DOGE -6.72%) is seeing another day of sell-offs in Wednesday's trading. The meme coin was down 10.6% over the previous 24 hours of trading as of 6:30 p.m. ET. Meanwhile, Bitcoin was down 1% over the stretch, and Ethereum was down 2.9%.
Dogecoin is moving lower today as investors react to some developments on the legislative front and take profits on the big bullish rally that's played out for the crypto market over the last several months. While the meme coin has seen some pullbacks in recent trading, its token price is still up roughly 26.5% over the last week and 51% over the last three months.
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Dogecoin pulls back as crypto investors look for the next bullish catalyst
The crypto market has been on an impressive run recently, with political and macroeconomic catalysts causing investors to stake out bullish positions and push valuations higher. Regulations for stablecoins were signed into law last week through the Genius Act, and the Clarity Act that would exempt cryptocurrencies from regulation by the Securities and Exchange Commission (SEC) in many instances was passed by the House and now goes to the Senate.
A rally for Bitcoin has also helped push valuations for the broader crypto space higher, but investors now seem to be wondering if it's time to take profits on the recent rally. The U.S. Congress has been sent into recess early than many investors expected, and the potential for meaningful delays on the legislative front is sending Dogecoin lower.
What's next for Dogecoin?
Developments on the political front suggesting that the U.S. government is taking a more supportive approach to the crypto industry have played a big role in Dogecoin's recent rally. On the other hand, political tensions continue to run high along multiple vectors, and investors are showing signs of disappointment with having to wait longer for the Senate's review of the Clarity Act and other legislation that could influence the crypto market.
The Federal Reserve's determination on whether or not to lower interest rates at its meeting at the end of this month could be the biggest near-term catalyst for Dogecoin and other cryptocurrencies, and valuations in the space could make big moves in the near term.
