Meme coins suffer huge decline as Bitcoin crashes

Nguồn Fxstreet
02/04/2024 14:20
  • Crypto market experiences high losses following Bitcoin's crash.
  • Popular meme coins see double-digit losses on Tuesday.
  • The meme coins category is down nearly 17% in the past 24 hours.

Double-digit losses in large-cap meme coins have caused the entire meme coin category to crash by about 17% in the past 24 hours. The recent decline follows new market dynamics that have disrupted traders' expectations following anticipation of the Bitcoin halving.

Read more: US Dollar strength could be one of the reasons why Bitcoin could crash more

Crypto market crash follows new market dynamics

In the past 24 hours, the crypto market experienced a significant downturn as Bitcoin's price plummeted to approximately $65,500, triggering a massive $484.48 million liquidation across the entire market.

Despite anticipating a bull run leading up to Bitcoin's halving – expected to happen later this month – the recent price movements of top altcoins and the frenzy surrounding meme coins have created an unexpected dynamic characterized by what some call a "weird bull market." Zach Rynes, a member of the Chainlink community, highlighted this unusual trend in an X post on April 1st, stating, "The market skipped a couple steps that we have seen with previous cycles, BTC-> straight to meme coins is a bit unusual."

Furthermore, Bitcoin reached an all-time high pre-halving for the first time, fueled by the introduction of spot Bitcoin ETFs. With these developments in play, traders are adjusting their strategies by taking profits from Bitcoin and reallocating funds into meme coins.

Also read: JUP up 21% in 24 hours as Dexlab integration may fuel more meme coin frenzy

Meme coins crash after impressive rally

This shift in market dynamics has led to an impressive rally in meme coins since the beginning of March. From well-established meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) to newly launched ones such as Pepe (PEPE), dogwifhat (WIF), Book of Meme (BOME), Slerf (SLERF), and Degen (DEGEN), the entire meme coin category has seen gains ranging from 100% to 1000%. However, while these high returns may be enticing, they also come with risks, as demonstrated by the recent market correction.

Following Tuesday's downturn, most of the top meme coins experienced double-digit losses, with DOGE down 11.6%, WIF down 14.1%, PEPE down 14.7%, and FLOKI down 12%. This shows that meme coins are often highly affected by a market setback in the same way they largely benefit during bull markets.

Read more: Meme coins gain traction after SEC’s partial win in Coinbase lawsuit: DOGE, SHIB, BRETT, POPCAT, BODEN

These losses contributed to a nearly 17% decline in the overall market capitalization of the meme coin category in the past 24 hours, coming just one day after surpassing the $70 billion mark.

In other developments, BitMEX co-founder Arthur Hayes recently suggested that meme coins, beyond their speculative purposes, could play a role in attracting developers' attention to the underlying blockchain networks they operate on.

 

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