Exploring the Recent Downtrend in Memecoins 📉
Within the crypto sector, it is evident that memecoins are facing a challenging period as trading activity and overall market value are on a decline. Despite the resilience of a few coins, most memecoins are struggling to keep up with the changing market dynamics. Investors are redirecting their focus and funds towards more established assets like Bitcoin and Ethereum. Let’s delve into the details below to understand the current scenario of memecoins in the crypto space.
Crypto Market Update: Memecoins Facing Declines 📉
– Cryptocurrencies such as Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) are experiencing lower performances recently, showing a reversal in trend from the previous sector enthusiasm.
– Data from CoinGecko reveals a 2.7% decrease in the overall market capitalization of memecoins in the last 24 hours, now standing at $55.48 billion.
– Memecoins like Bonk (BONK), Floki (FLOKI), and Memecoin (MEME) have recorded losses, with BONK dropping by 6%, FLOKI by 3.3%, and MEME by 3% in the same period.
– Dogecoin, the top meme coin by market cap, saw a 2.1% price drop in a day, reducing its value to $22.74 billion, representing nearly 41% of the overall memecoin market.
– Even the second most popular memecoin, SHIB, experienced a loss of 2.4%, bringing its market cap down to $14.29 billion.
The Decline of Altcoins Post-Memecoin Boom 📉
– Historically, bullish crypto markets are propelled by a surge in altcoins, yet the current correction in memecoin prices has affected Total3 – the total market cap of all cryptos excluding Bitcoin and Ether.
– Total3 has decreased by 15% since early April, now at $661.41 billion, forming a descending parallel channel on the weekly chart.
– Profit-taking occurred as the Relative Strength Index (RSI) hit an overbought level, indicating that altcoins were overvalued, triggering a trend reversal or corrective pullback.
– Altcoins are following a downward trajectory, evident in the descending parallel channel, with the RSI dropping from 89 to 62 in the last seven weeks.
– Failure to breach the upper limit of the descending channel at $660 billion may lead to further fluctuations in altcoins, including major memecoins.
Decrease in Trading Volume: Are Investors Losing Interest? 📉
– Weekly memecoin trading volume has been dwindling since March, with a significant 81% decline according to Dune data, spanning all blockchains like Ethereum and Solana.
– From a peak of $998.55 million in March, the volume plummeted to $191.88 million by the week ending May 3rd, signaling waning trader interest or confidence.
– Key memecoins like DOGE saw a 50% drop in trading volume from March 7 to May 6, while SHIB and PEPE witnessed declines of 88% and 51% respectively.
– The recent tone shift of the US Federal Reserve on potential interest rate cuts has triggered risk aversion in the crypto market, impacting highly profitable assets like memecoins.
– With the US economy gaining strength, investors are pivoting towards safer assets like US Treasuries, favoring stable returns over the volatility of cryptocurrencies, including memecoins.
Hot Take: The Future of Memecoins Amidst Declines 📉
It is evident that memecoins will not vanish entirely from the crypto landscape. However, their trading activity and market value have seen a recent downturn. With investors flocking towards more established assets and the overall sentiment shifting, memecoins are facing challenges. As the crypto market continues to evolve, it will be interesting to see how memecoins adapt and whether they can regain their previous allure in the future.
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