Kelvin Testimony Amachree
The recent days have seen a significant downturn in the cryptocurrency market, especially impacting meme coins like Shiba Inu and Dogecoin. These coins have experienced substantial declines, showing no signs of immediate recovery.
All meme coins’ market capitalization has dropped by 1% to $49 billion, marking a significant decrease from their previous peaks. This decline contrasts sharply with their previous success, where they had gained prominence in the cryptocurrency market.
Data from CryptoQuant indicates a sharp decline in the dominance of meme coins in the altcoin market over the past 60 days. This trend suggests waning investor interest in these coins, shifting focus to other options.
CryptoQuant’s CEO, Ki Young Ju, has observed that the move away from meme coins reflects a shift towards valuing fundamentals over speculation among investors. This change in perspective likely stems from the growing maturity of the cryptocurrency market.
The decline in meme coin market can be attributed to investors leaning towards coins with strong fundamentals rather than those primarily driven by speculation. This transition signifies a natural progression as investors become more discerning and sophisticated.
Popular meme coins like Shiba Inu and Dogecoin have been hit hard, with Shiba Inu declining by 5.2% in the last 24 hours and Dogecoin by 2.9%. Unless there is a notable shift in market sentiment, these downward trends are anticipated to persist.
The slump in meme coins extends beyond Shiba Inu and Dogecoin, evident in most meme coins encountering similar drops. For instance, dogwifhat (WIF) has seen a 22% decline over the past week, indicating a general market downturn rather than isolated coin issues.
Overall, the decline in meme coins represents a correction in the cryptocurrency market as investors increasingly prioritize coins with robust fundamentals over those reliant on speculation. This trend is likely to continue, with meme coins facing continued declines unless they showcase strong fundamentals.
Meme Coin Liquidity Alters High
The meme coin market has witnessed a significant surge in liquidity, doubling since the beginning of the year, as reported by Kaiko. This surge in liquidity has simplified the buying and selling of meme coins, leading to heightened trading activities.
Liquidity in the meme coin market peaked in early June, hitting an all-time high of $128 million. Despite a slight dip since then, the market remains highly liquid, enabling significant trades at stable prices.
Despite the recent market correction, meme tokens continue to outperform Bitcoin and other altcoins this year, surpassing a combined market capitalization of $1 billion with a 24-hour trading volume exceeding $260 million.
Institutional investors are increasingly recognizing the potential of the meme coin market, intensifying their allocations to dogecoin (DOGE) and shiba inu (SHIB) due to their high liquidity. Political meme coins related to events such as the forthcoming US presidential debate are expected to endure ongoing volatility.
The rise in liquidity and trading activity in the meme coin market showcases the increasing acceptance of cryptocurrencies in mainstream circles. As the market progresses, meme coins are likely to assume a more critical role in the cryptocurrency landscape.