Fun

3 reasons why DOGE, WIF and other memecoins are crashing

News Feed - 2024-04-11 01:04:06

Yashu Gola7 hours ago3 reasons why DOGE, WIF and other memecoins are crashingThe memecoin market"s downturn seems like a typical adjustment seen before Bitcoin halvings, yet more downside is possible.1203 Total views1 Total sharesListen to article 0:00Altcoin WatchOwn this piece of crypto historyCollect this article as NFTJoin us on social networksMemecoins like Dogecoin (DOGE), Dogwifhat (WIF), and Pepe (PEPE) are among the worst-performing cryptocurrencies today, highlighting a noticeable waning of the earlier enthusiasm that propelled the sector.Top memecoins" hourly, daily, and weekly price performance. Source: CoinMarketCapPre-halving correction fractal


Prima facie, the decline across the top joke cryptocurrencies is part of a pre-halving dump across the crypto market.


Top digital assets, including Bitcoin (BTC) and Ether (ETH), have recently pulled back from their yearly highs as traders secure profits ahead of the Bitcoin Halving 2024, prompting similar strategies in the memecoin sector. 


That is akin to how memecoins reacted ahead of Bitcoin"s previous halving in May 2020, with DOGE"s price dropping by over 22.5%.DOGE/USD daily price chart. Source: TradingView


There exists a strong positive correlation between Bitcoin and top memecoins. For instance, BTC"s daily correlation coefficient versus DOGE was 0.82, showcasing strong possibilities of DOGE"s price trends mirroring BTC"s in the coming days. BTC/USD"s daily correlation versus DOGE/USD, SHIB/USD, PEPE/USD, and WIF/USD. Source: TradingView


Steno Research projects that Bitcoin may experience a pattern similar to its 2016 halving. It anticipates a continuation of selling pressure for up to four months following the halving. This "sell-the-news" mood is further depreciating memecoin sector valuations. Memecoin trading volumes are crashing


The memecoin sector"s correction accompanies strong declines its weekly trading volumes, according to data resource Dune Analytics.


Notably, the memecoin transaction flows across all blockchains, including Ethereum and Solana, have dropped collectively by 88% from its recent top of roughly $1 billion. This suggests that traders" interest or confidence in the sector has waned lately.Memecoins total trading volumes. Source: Dune Analytics


The decline in trading volumes across the memecoin sector has accelerated further amid reports of Solana outage. Notably, roughly 75% of all transactions on the network failed during March and early April sessions, primarily involving activity brought by the recent memecoin mania.


Related: Solana devs target April 15 for failed TX fix — It’s ‘not a design flaw’


Solana has become the primary blockchain for retail users and memecoin traders, with trading volumes on its decentralized exchanges rising by more than 300% in Q1 2024 compared to the previous quarter, noted Peter Horten, a researcher at data analytics platform Messari.


But in recent weeks, Solana"s DEX volume trend has shifted downward, as shown below.Solana DEX volumes. Source: Dune Analytics


This lower DEX activity has preceded a decline in most of the top Solana-based memecoins.Solana memecoins" hourly, daily, and weekly price performance. Source: CoinGeckoDe-risk mood amid strong U.S. numbers


Increasing bets on the delay in interest cuts from the U.S. Federal Reserve—in the wake of robust U.S. labor data and persistent inflation—have also boosted selling sentiment in the crypto market, particularly affecting memecoins, which are among the most profitable assets worldwide so far in 2024.Memecoins versus S&P500 and BTC/USD yea-to-date performance chart. Source: TradingView


According to CME data, interest rate futures traders" expectations have significantly shifted. Approximately 81% now wager that the Federal Reserve will keep interest rates steady at 500-525 basis points in June compared to around 60% earlier in April.


Assets that yield, such as U.S. Treasuries, become more appealing compared to non-yielding counterparts like cryptocurrencies during higher interest rate periods. Consequently, this shift diminishes the appeal of riskier investments, including memecoins.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Dogecoin# Altcoin# Analysis# Markets# Market Analysis# Solana# Shiba Inu# Memecoin# PepeAdd reaction

News Feed

FTX founder SBF asks for a 6.5-year sentence, tells prison guards to invest in Solana
Prashant Jha45 minutes agoFTX founder SBF asks for a 6.5-year sentence, tells prison guards to invest in SolanaA report published in the NYT claimed SBF is giving investment advice to prison guards, reportedly asking the
Meet CoinDesk Next Week in Tokyo
CoinDesk will be in Tokyo and we’re excited to meet our readers on Monday, October 14 at 6 p.m. CoinDesk Japan will be hosting this informal event.
DeFi Yield Protocol Rebrands as Dypius to Help Users Embrace Metaverse Opportunities
DeFi Yield Protocol Rebrands as Dypius to Help Users Embrace Metaverse Opportunities press release PRESS RELEASE. Bucharest, Romania,12/12/22,
Web3 needs player-centric games for mass adoption — Websea exec
Zoltan Vardai11 hours agoWeb3 needs player-centric games for mass adoption — Websea execInstitutions are also becoming interested in Web3 gaming as more player-centric GameFi projects emerge.588 Total views2 Total shar
Kraken Becomes First Global Crypto Exchange Fully Licensed by Abu Dhabi Global Market
Kraken Becomes First Global Crypto Exchange Fully Licensed by Abu Dhabi Global Market Abu Dhabi Global Market has awarded a full financial license to crypto exchange Kraken. ȁ
Bitcoin clings to $67K, but analysis warns of 10% BTC price drop next
William Suberg14 hours agoBitcoin clings to $67K, but analysis warns of 10% BTC price drop nextBitcoin bulls are enjoying 10% month-to-date gains currently, but one trader warns that the picture should soon look very dif
World’s Largest Collector Car Auction House RM Sotheby’s to Accept Cryptocurrencies
World"s Largest Collector Car Auction House RM Sotheby’s to Accept Cryptocurrencies On Wednesday, the world’s largest collector car auction house by total sales, RM Sotheb
Ethereum Investment: Trump Crypto Project Grabs 722 ETH At $2.5 Million
Este artículo también está disponible en español. World Liberty Financial (WLFI), the latest venture by incoming US President Donald Trump, has generated a lot of interes
Solana MACD Curling Up – Is This The Prelude To A Breakout?
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Data Lake’s Consent-to-Earn: A Revolutionary Model for Data Monetization?
Data Lake"s Consent-to-Earn: A Revolutionary Model for Data Monetization? sponsored During the last decade or so, data has become a hot topic and often a controversial one. As a res
Ciaran Lyons2 hours agoTerra Classic community elects to cease USTC mintingThe community strongly backs stopping TerraUSD Classic (USTC) minting and reminting in favor of burning tokens to restore its U.S. dollar peg.108
Ross Ulbricht’s 9th Price Analysis Predicts Bitcoin Prices Below $3,000
Ross Ulbricht"s 9th Price Analysis Predicts Bitcoin Prices Below $3,000The founder of the Silk Road marketplace, Ross Ulbricht, has published another analysis that attempts to predi