Meme coins sell-off continues
Altogether, all meme coins tracked by CoinGecko have a market cap of over $38 billion, down from their year-to-date high of more than $68 billion.
A closer look at their charts shows that most of them have a close correlation with each other. All tokens mentioned below have fallen in the past five days and have retreated by over 50% from their highest point this year.
- Bitcoin (BTC) was stuck below $60,000 while most meme coins continued their steep downfall.
- Dogwifhat (WIF) token has dropped for five consecutive days and is down by over 51% from its highest point this year.
- Similarly, Brett (BRETT), the biggest meme coin in the Base Blockchain, has retreated for five days, is down by 60% from its all-time year. Long-term holders have lost over $1 billion as its market cap has dropped from over $1.89 billion to $794 million.
- Bonk (BONK), the first Solana (SOL) meme coin was also one of the worst-performing cryptocurrencies on Aug. 17 as it has retreated by 63% from its March highs.
- Pepe (PEPE) has also moved to $0.0000071 after falling for several straight days.
Additionally, technicals suggest that these tokens have more room to go down.
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Pepe death cross and head and shoulders pattern
Pepe, which is often the most actively traded of the meme coins, moved below the 50-day moving average on July 31 and the 200-day EMA on Aug. 11. If this downtrend continues, it means that Pepe could form a death cross, which often leads to more upside.
Additionally, Pepe has formed a head and shoulders pattern, one of the most popular bearish signs in the market.
The most important catalyst for these meme coins is Bitcoin, which has stalled below $60,000 this week. If Bitcoin resumes the downtrend, it means that meme coins will continue falling, with most of them eying their August lows.
Historically, meme coins tend to show extreme moves in Bitcoin’s direction. For example, Pepe rose by over 1,500% between January and March as Bitcoin rose by over 80% in the same period. It has retreated by over 50% while BTC is down by 20% from the same period.
Traders move to meme tokens like Pepe, Dogwifhat, Bonk, and Brett when Bitcoin is rising because of their cheaper price.
Instead of buying Bitcoin, which goes for almost $60,000, most traders opt for a token like Pepe that sells for $0.0000071. The theory is that these tokens have a bigger chance of doubling than Bitcoin.
