What’s Behind the Massive Drop in Layer 2s, GameFi, and Meme Tokens?

• Crypto markets tumble as Bitcoin drops from $111K to $105K, dragging altcoins down hard.
• Layer 2 and gaming tokens lead declines with double-digit losses across timeframes.
• Profit-taking, macro risks, and FTX repayments drive a broad crypto market correction.

An overall selloff has affected the cryptocurrency market, with Layer 2 tokens, gaming projects, and meme coins experiencing sharp drops across multiple timeframes. The correction comes as Bitcoin retreated from its recent high of above $111,000 to current levels around $105,000. This has triggered weakness throughout the altcoin sectors.

Layer 2 scaling solutions have been particularly hard hit, with the sector’s combined market capitalization falling 7.34% to $13.54 billion. Stacks (STX) leads the decline with a 19.95% drop over seven days, trading at $0.7861. Optimism (OP) follows closely with a 14.88% weekly decline to $0.6883, while Arbitrum (ARB) has fallen 13.63% to $0.3709.

The weakness extends across different timeframes, with most Layer 2 tokens showing red across 24-hour, weekly, and longer periods. This broad-based decline suggests systematic selling rather than project-specific issues dri…

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