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Why did dogecoin's price drop today? FTX contagion hampers sentiment

Dogecoin (DOGE-USD) tokens dipped 9.4% in Monday afternoon trading as the dominoes continue to fall from the implosion of cryptocurrency exchange FTX thus hurting investor sentiment.

The FTX aftermath has come to the point where crypto lender BlockFi, which has deep ties to Sam Bankman-Fried's crypto empire, filed for Chapter 11 bankruptcy and reportedly warned of mass layoffs. The news extended the bearish trend seen in major cryptos, with bitcoin (BTC-USD) testing its $16K technical support level during late morning trading. The token, though, has since eased some of those losses, now down 2.2% to $16.20K as of shortly before 4:30 p.m. ET.

Doge (DOGE-USD), the world's largest meme coin by market cap, saw similar price action throughout the session, having slid as much as 12.9% before slightly trimming those losses, now changing hands at $0.09.

Overall, the crypto market cap stood at $820.9B, off 2.6% over the past day, according to CoinMarketCap data. It's worth noting that all three major U.S. stock indices finished Monday's session in the red due to concerns about interest rates, shutdowns in China and ongoing instability in the crypto ecosystem.

Prior to the collapse of FTX, most institutional investors planned to boost their crypto allocation in the next three years.