Warning: Memecoins Are Now Falling, What To Expect Next?

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After a ride-up in price recently, memecoins are now lagging behind the rest of the crypto market. Top memecoins such as Dogecoin dropped by 5.44%, Shiba Inu slighted by 3.95% and Pepe also abated by 3.94%.
Source: Bitscreener
Other coins such as BONK and FLOKI also declined by 4.49% and 5.28% respectively in the last 24 hours. Memecoin (MEME) fortunately remained stable over the same period.
Notably, Dogecoin (DOGE), the top memecoin by total value, dipped down to $22.74 billion in its total market value. However, DOGE remains a dominant player, still holding onto almost 41% of the entire memecoin market.First of all, other cryptocurrencies are also struggling. In the past, altcoins have been the main drivers of price increases. But now, things are different. Altcoins themselves are experiencing a significant decrease in value. And this overall weakness in the crypto market is making memecoins to be affected as well.
Another factor is that it's a time when investors taking profits. After a big increase in prices during the first quarter of 2024, investors are now seeing a chance to sell their memecoins and make money. This behavior may be influenced by a tool called the Relative Strength Index (RSI), which suggested that memecoins might have been overvalued. With this concern in mind, investors decided to sell before there was a possible drop in prices. The fact that investors are pulling out their money has played a big part in the current.Source: Yahoo Finance
Another factor contributing to this trend is the decrease in trading activity within the memecoin market. It seems that interest in memecoins is declining, as evidenced by a decrease in trading volume on blockchains such as Ethereum and Solana since the beginning of March. This drop indicates an erosion of trader's confidence in the sector.
Moreover, the state of macroeconomics in the United States is also playing a role in impacting memecoins. Recent reports regarding the US economy suggest that it may be performing better than initially anticipated. This has made individuals more cautious about investing in assets like memecoins and instead opt for options such as US government bonds, which offer a more stable return. With economic conditions improving memecoins are no longer as attractive to investors as they once were. Consequently, some people may be selling off their memecoins to explore opportunities, within the cryptocurrency realm.While Dogecoin and Shiba Inu may be the poster children of memecoins, they're the exceptions, not the rule. Unlike Bitcoin, with its limited supply, memecoins often have an endless supply that keeps growing through mining. However, this constant inflation makes them a risky investment. Dogecoin, for example, has fallen 91% of its value from its peak, and even Shiba Inu is down significantly by 84%.
The odds are stacked against you with memecoins. Many follow the fate of their forgotten brethren from 2013-2014, disappearing entirely and leaving investors with nothing. Experts warn that most memecoins eventually fizzle out, and the "fear of missing out" during bull markets shouldn't cloud your judgment.Think of memecoins as a gamble, not a long-term investment. Unlike traditional investments, they lack the mechanisms to ensure value or prevent them from becoming worthless. If you're considering memecoins, be prepared to potentially lose your entire investment.This price drop is a warning that memecoins can be so unpredictable. Their rapid rise was more about hype and social media buzz than anything else. While the current downturn might seem dramatic, it doesn't mean memecoins are doomed. But, it's a good reminder for both seasoned investors and newcomers on the importance of research and understanding the risks before investing. Captivating trends can cool off fast, and a little skepticism can go a long way in the wild world of cryptocurrency.
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