Memecoins
Crypto Markets See Slowdown as Memecoins Slump and Bitcoin ETF Outflows Spark Concerns
Cryptocurrency markets have taken a hit this week, with major coins like Bitcoin seeing price drops and memecoins suffering significant losses.
The slowdown comes amid concerns about a potential tightening by the US Federal Reserve and news of outflows from Bitcoin ETFs, with uncertainty highlighted by the end of a 20-day streak of inflows into spot BTC ETFs and significant drops in memecoins (15%) and Solana. (10%) during the last week.
Memecoin Mania meets reality
Memecoins, the once hot corner of the crypto market, are facing a harsh reality. Dogecoin (DOGE) and Shiba Inu (SHIB), the two most recognizable memecoins, have both seen double-digit percentage declines in recent days. SHIB, in particular, is down 18.4% over the past week, while OG doggie DOGE is down 13%, WIF is -20.09%, BONK is -21.17% and PEPE is -11.97% during the same period, placing them among the worst performing cryptocurrencies this week.
The change in memecoin Fortune also led to a 7% decline in Solana, a blockchain that has been the focus of much of this space, over the past 24 hours. The token currently stands at $137.44.
This drop could signal a shift in investor sentiment away from memecoins and towards more established cryptocurrencies perceived as useful. However, it is important to note that memecoins are known for their unpredictable behavior, so a rapid reversal is not completely ruled out.
Bitcoin ETF exits raise questions
Added to market concern is the announcement of capital outflows from Bitcoin ETF. These exchange-traded funds, which allow investors to gain exposure to Bitcoin without directly owning the cryptocurrency, have been hailed as an important step toward widespread adoption.
However, recent reports indicate a net outflow of more than $620 million from Bitcoin ETFs last week, suggesting that some investors may be exiting due to the current market climate.
The pain continued this week: On Monday, the 11 Bitcoin ETFs saw cumulative net outflows of $145.83 million, led by Fidelity’s FBTC, which saw $92 million in outflows, The Block reported.
The leak could be linked to the hawkish stance of the US Federal Reserve, which has signaled potential interest rate hikes to combat inflation. Rising interest rates can make riskier assets, like cryptocurrencies, less attractive to investors.
At press time, Bitcoin stood at $65,701, -0.74% in 24 hours and -2.69% in 7 days, according to CoinMarketCap data.
“The price of Bitcoin has continued to decline since recent hawkish comments from the Federal Reserve. This is the fourth time that BTC has failed to cross the $71,500 mark and return to its all-time high. The brutal reversal after the CPI-induced $4,000 price rise sowed doubt in the minds of investors,” said Brn analyst Valentin Fournier.
“While we believe in Bitcoin’s rebound, a new catalyst will be needed for it to break out of the $65,000-$71,000 range. Consistent evidence of a decrease in U.S. inflation or a “Lower interest rates globally could provide the liquidity needed to push the market higher,” the analyst added.
A Lone Bright Spark: TON bucks the trend with explosive growth
While the market as a whole is experiencing a slowdown, the Telegram Open Network’s native token, TON, has defied the downward trend with a price rally in recent days. This unexpected rally follows significant developments within the TON ecosystem.
YOUR Impressive performance can be attributed to the increasing total value locked (TVL) on the TON blockchain and its fast-growing DeFi ecosystem. According to CoinTrust, TON’s TVL has more than doubled over the past three weeks, surpassing $600 million. This substantial growth reflects investor confidence in the network’s potential and the development of robust DeFi applications on TON.
Second, the integration with Telegram, a messaging platform with over 500 million monthly active users, is another key factor. This integration has the potential to introduce a massive user base to TON, fueling increased adoption and demand for the token. Finally, the recent rise of memecoins within the TON ecosystem, such as Resistance Dog, The Resistance Cat, and Ton Inu, has attracted additional attention.