Memecoins
Bitcoin above $64,000 – Here’s the impact on memecoins like Dogecoin, Shiba Inu
- The overall memecoin market plunged, led by DOGE, SHIB and PEPE.
- Technical analysis shows further potential declines for the altcoin market.
The cryptocurrency market has seen significant fluctuations recently, with meme coins experiencing a noticeable slowdown.
These whimsically themed cryptocurrencies, often inspired by internet memes and jokes, saw their collective market capitalization reduced to $54.5 billion, a 3.3% decline over the past day.
Despite their typically volatile nature, the decline has been brutal and influenced mainly by major players such as Dogecoin [DOGE], Shiba Inu [SHIB]And Pepe [PEPE].
After a period of robust growth, during which Dogecoin, for example, surged by 9.8% last week, it, along with PEPE, faced a slowdown of more than 4% in a single day.
The Shiba Inu, on the other hand, has seen a steady decline over the week, culminating with a 4.5% decline yesterday.
This series of declines has sparked conversations and concerns regarding the sustainability of meme coins in a bear market.
However, although the price performance may make Shiba Inu the reddest in the top 3 in the meme coin market, AMBCrypto recently reported that a $0.000031 projection being the immediate target of SHIB if the bulls prevail.
A change in the Memecoins market coming
The decline in memecoin values coincides with a broader decline in their trading volumes.
According to Dune analysismemecoin transaction volumes on major blockchains such as Ethereum [ETH] And Solana [SOL] fell dramatically.
Source: Dune
From a high of nearly $998.55 million in March, weekly trading volume dropped shockingly to just $1.6 million as of May 6.
This sharp reduction indicates a significant decrease in merchant interest and confidence in these digital assets.
On closer inspection, individual coins reflected this trend.
Dogecoin’s trading volume, for example, has halved by 50% over the past two months, while Shiba Inu and PEPE have seen their volumes decline by over 80% and 50% respectively.
This overall market behavior reflects a broader disinterest on the part of investors.
Implications for the broader crypto market
The slowdown in meme coins could be a precursor to broader challenges in the market. Traditionally, bull markets in the cryptocurrency sector are often propelled by a surge in altcoin activity.
However, the recent widespread downturn suggests that bearish trends may continue to dominate the broader crypto landscape.
In technical terms, the TOTAL3 chart – the total market capitalization of all cryptocurrencies excluding Bitcoin [BTC] and Ethereum, have demonstrated multiple downward structural breaks.
This indicates a possible prolonged bearish phase for altcoins.
Source: TradingView
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Additionally, the altcoin market recently tested a significant supply zone on the 6-hour chart, marked by a shooting star followed by a bearish engulfing candlestick pattern closing below the shooting star .
This sequence suggests that the altcoin market could continue to face downward pressure until a low is reached, and then a potential reversal to the upside could then be possible.