As a seasoned cryptocurrency investor with over a decade of experience in this dynamic market, I can confidently say that the current momentum in the meme coin category is quite intriguing. Having navigated through multiple bull and bear cycles, I’ve learned to spot trends that could potentially yield substantial returns.
On Monday, Bitcoin experienced a significant drop, plummeting approximately 10% from its record high of $104,088 to a low of $94,150. This sudden fall, known as a flash crash, briefly affected other cryptocurrencies such as Dogecoin, Shiba Inu, Pepe, Dogwifhat, and Bonk, causing them to also decline in value.
In the last day, the leading meme tokens, as ranked by market value, experienced sizable declines approaching double digits. It’s uncertain at this point if these meme coins will bounce back from their recent slumps during this period and reach their lowest points for the cycle.
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Bitcoin correction and meme coin price trend
On Tuesday, Bitcoin saw a dip of approximately 6% from its record high, marking a conclusion to the period known as the “altcoin season.” The Blockchain Center’s Altcoin Season Index stands at 65 out of 100, signifying that this phase of increased altcoin activity has come to an end.
The technical analysis suggests conflicting clues about Bitcoin’s price direction: while the Relative Strength Index (RSI) stands at 59 and is climbing, it indicates some strength; yet, the Moving Average Convergence Divergence (MACD) reveals a hidden bearish trend in the Bitcoin market.
A continued adjustment in Bitcoin might not be beneficial for meme coins, since a drop in the primary cryptocurrency could lead to widespread liquidations of meme coins and other altcoins on derivative trading platforms.
In the last day, meme coins have experienced a significant drop, but within the past hour, they’ve shown signs of recovery. However, it’s important to note that there have been substantial adjustments – even as high as ten percent – in the leading ten cryptocurrencies.
The meme category erased nearly 15% in market capitalization in the past 24 hours, down to $128.26 billion.
Meme coins and Santa rally
As meme coins drive up prices during this altcoin boom, it’s uncertain if these “seasonal” increases will lead to further price hikes. Traditionally, around the Christmas period, there’s often an uptick in altcoins due to reduced activity on cryptocurrency exchanges and fewer trades being made.
Two elements contribute to a smoother flow of market activity and greater price volatility when liquidity is reduced, namely increased flexibility and heightened susceptibility to changes.
Historical data from meme coin price charts suggests that these tokens tend to surge before Christmas. If this pattern repeats itself, leading meme coins like Dogecoin may regain their losses and potentially experience a resurgence by the end of 2024.
2021 has seen DOGE surge by approximately 350%. Meanwhile, during the same period, SHIB, PEPE, WIF, and BONK have experienced growth of around 160%, 1,860%, 145%, and 180% respectively.
In spite of the current drop in the prices of meme coins this year, every token among the top five has delivered triple-digit returns to investors in 2024. This trend suggests a potential rebound and end-of-the-year surge for the entire category.
Trump correlation and bullish drivers
During this current cycle, the incoming U.S. President, Donald Trump, and his Department of Government Efficiency (D.O.G.E), headed by tech mogul Elon Musk and another Presidential candidate, Vivek Ramaswamy, have been significant catalysts in driving up the value of meme coins.
In recent market activity, remarks by Elon Musk and the addition of D.O.G.E have significantly influenced the value of Dogecoin (DOGE). Additionally, factors such as capital shifting from other cryptocurrencies (altcoins) and the rise of “altcoin season” have propelled meme coin prices upward in the past four weeks.
As a researcher delving into the dynamic world of cryptocurrencies, I’ve noticed that meme coins like DOGE, SHIB, PEPE, WIF, and BONK are consistently trending day by day. These tokens have solidified their status as ‘blue-chip meme coins’, a title reflecting their substantial market capitalization. According to CoinGecko data, this market cap ranges from approximately $1.21 billion to an impressive $15.33 billion for these tokens.
In their recent report, 21Shares found that meme coins have significantly influenced trading activity on Solana’s decentralized exchanges, with many trades involving these fun, trendy cryptocurrencies contributing to a considerable portion of the market share for Solana, as it competes against XRP and Ethereum.
According to information from the Artemis Terminal, meme coins have experienced a staggering 261% increase so far this year, placing them as the second most successful sector within the cryptocurrency market, narrowly behind traditional assets.
LBank, a digital currency trading platform, highlighted the leading 10 “meme” cryptocurrencies from the year 2024, which aren’t typically regarded as top-tier performers, yet surpassed their respective industry sector.
Technical analysis and price targets
At the moment, Dogecoin is down by approximately 22% from its highest point in 2024 ($0.48434), as indicated in the DOGE/USDT weekly price chart. The anticipated goal for this cycle is to reach the May 2021 peak of $0.73995, and an important barrier along the way lies at $0.60000.
As a crypto investor, I’m noticing that the Relative Strength Index (RSI) indicates that DOGE is currently overvalued at the moment. Historically, when DOGE is overvalued, it often triggers a sell signal. Given this, a short-term correction seems likely, which might push the meme coin down to a price range that I’d consider attractive for buying – approximately between $0.29874 and $0.35740.
MACD indicates an underlying positive momentum in the DOGE price trend.
The value of Shiba Inu dropped approximately 23% from its peak in December, which was at $0.00003343. However, the Moving Average Convergence Divergence (MACD) suggests a persistent optimistic trend for the Shiba Inu price movement.
The target for the cycle is a March 2024 peak of $0.00004567, nearly 40% above the current price. The buy zone for Shiba Inu is between $0.00001983 and $0.00002259.
At the moment, PEPE is positioned within the buying range, defined by the 61.8% and 78.6% Fibonacci retracement levels. These levels are derived from the rally that started at the November 4 low of $0.00000771 and peaked on December 9 at $0.00002836.
The target for the cycle is 141.4% Fibonacci retracement level at $0.00003691.
As an analyst, my objective for this financial cycle is to aim for the all-time high of approximately $4.860. However, a potential resistance could be encountered at the April 2024 peak value of $4.343. For any investors who have been sidelined, I recommend considering entry points within the range between significant support levels at around $2.438 and $2.649.
In simpler terms, the Moving Average Convergence Divergence (MACD) indicates that the price of WIF could potentially increase during this cycle. However, it’s important for traders to be vigilant since the Relative Strength Index (RSI) is currently trending downwards, suggesting a possible change in direction.
At the moment, BONK’s purchase range lies between $0.00002786 and $0.00003574. The record high for BONK stands at $0.00006230, while its current resistance is around $0.00005666. The Moving Average Convergence Divergence (MACD) indicates a positive outlook for the price of BONK.
The Relative Strength Index (RSI) is trending lower with a value of 54, which is near the balanced point. It’s possible that BONK might experience a temporary decline before it rebounds and moves towards its peak during its current cycle.
Strategic consideration
The significant drop in Bitcoin’s price has caused the overall market value of meme coins to decrease by approximately 15%. It is common for meme tokens to experience a downward trend when there are corrections in Bitcoin’s price, so it’s essential for traders to keep an eye on the trends in Bitcoin’s price as this could lead to decreases in the prices of meme coins during this cycle.
It appears that the surge of altcoins, including meme coins, has subsided, and they are no longer driving the majority of crypto token gains. To safeguard against potential scams like “rug pulls” and significant losses, traders should consider investing in meme coins with a robust community, substantial liquidity, and a relatively larger market capitalization.
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2024-12-11 11:54