- The cryptocurrency market is currently experiencing a marked downturn, especially within the realm of meme coins.
- This phenomenon is led by the dominant players Bitcoin (BTC) and Ethereum (ETH).
- Major meme coins such as Dogecoin, Shiba Inu, and Pepe have seen sharp declines, their volumes falling significantly.
The cryptocurrency market is undergoing a significant slump in meme coin performance, with leading tokens like Bitcoin and Ethereum driving this trend. Discover why in our latest article.
Persistent Weakness in the Cryptocurrency Market
Historically, bullish trends in the cryptocurrency market are generally initiated by the major players like BTC and ETH, which then influence the performance of altcoins. However, recent market corrections have impacted these trends significantly. The Total3 index, which tracks the market cap of all crypto assets excluding BTC and ETH, saw a rise to $720 billion on June 5 but has since retreated, reflecting a 19% decline to stand at $582.88 billion.
This downturn has formed a descending parallel channel on the daily charts, showcasing a broader market correction. Concurrently, the daily Relative Strength Index (RSI) dipped below the overbought threshold, indicating that veterans were capitalizing on their holdings, particularly Ethereum-based meme coins like PEPE. An RSI near 70 typically points to overvaluation, prompting market corrections.
Decline in Meme Coin Trading Volumes
The earlier part of the year saw meme coins capturing significant market attention. However, recent months have evidenced a stark contrast. Data from Dune Analytics reveals that transactions across various networks, including Ethereum and Solana, plunged from a peak of $996.7 million in March to just $30.35 million by mid-June.
Dominant meme coins have not been immune to this downturn. Dogecoin (DOGE) encountered a substantial 41% decrease in trading volumes from mid-April to mid-June. Likewise, Shiba Inu (SHIB) and Pepe (PEPE) experienced declines of 68% and 34%, respectively.
Key Market Indicators and Takeaways
- Investors are liquidating meme coins, driving up daily trading volumes despite falling market values.
- High RSI readings close to 70 signal overvaluation, triggering profit-taking behaviors.
- There have been pronounced declines in meme coin trading volumes, notably in DOGE, SHIB, and PEPE.
- The Total3 index’s 19% drop from early June underscores a wider market correction.
The technical signals indicate that the downtrend in altcoin performance continues, pulling the Total3 indicator downward in a descending parallel channel. Additionally, the RSI plummeted from 62 to 30 over a two-week period, reflecting intensified bearish momentum within the market.
Conclusion
To summarize, the cryptocurrency market is currently grappling with a pronounced decline in meme coin performance, led by broader corrections in BTC and ETH. This has prompted increased liquidation efforts and significant drops in trading volumes for key meme coins. Understanding these dynamics is crucial for investors, who should approach this volatile market with caution and informed strategies.
