Originally published on: June 18, 2024
Memecoins like Dogecoin, Shiba Inu, and Pepe are currently underperforming the cryptocurrency market, showing a noticeable decline in their value. In the past 24 hours, the total market capitalization of memecoins has dropped by 11%, reaching $45.31 billion, while the trading volume has surged by 79% to $6.25 billion.
Among the top-performing memecoins, Dogwifhat, Book of Meme, and Brett experienced the most significant losses in market value, demonstrating a downward trend. Even popular memecoins like DOGE and SHIB saw a decline of 11.4% and 11.5%, respectively, on the daily chart, with PEPE dropping by 10%.
So, why exactly are memecoins taking a hit today? Let’s explore some reasons behind this market correction.
Typically, during bull markets, retail investors drive the momentum, with funds rotating from major cryptocurrencies like Bitcoin and Ether into altcoins. However, as the prices of memecoins are currently correcting, the total market cap of all cryptocurrencies excluding BTC and ETH has pulled back after a surge to $720 billion on June 5.
Traders seem to be cashing out as the daily Relative Strength Index (RSI) shows a reversal from the overbought region, correlating with Ethereum-based memecoins reaching new highs. The RSI close to 70 indicates an overvalued market, prompting a corrective pullback.
From a technical standpoint, altcoins remain in a downtrend, as evidenced by Total3’s movement inside a descending parallel channel. If Total3 fails to breach the middle boundary of the channel at $600 billion, memecoins could witness further declines in the coming days.
Moreover, memecoin trading volumes have been on the decline since March, reflecting decreasing interest among traders. Data shows that DOGE, SHIB, and PEPE have all witnessed significant drops in trading volumes, underscoring weakening market confidence.
The ongoing crypto market drawdown has resulted in over $434 million in leveraged positions being liquidated in the past 24 hours, with DOGE and SHIB longs comprising a large portion of these liquidations. Traders need to exercise caution in these volatile conditions and conduct thorough research before making any investment decisions.
Investigate Further for Investment Insights
For more critical insights into investment opportunities, risk mitigation, and refined trading strategies, subscribe to our Markets Outlook newsletter. Delivered every Monday, this newsletter will keep you informed about the latest trends in the market.
By subscribing, you agree to our Terms of Services and Privacy Policy. Stay ahead of the game with valuable insights into the cryptocurrency market and make informed investment decisions.
