Crypto: Game Over for Memecoins?

The very particular sawtooth patterns of memecoins can be both enticing and deceptive for inexperienced crypto traders. These meme cryptos, inspired by internet memes, offer quick gains but also vertiginous losses. This text explores the recent phenomenon of the decline of memecoins and the reasons why traders are turning away from these volatile tokens.

Memecoins in disarray

Traders sometimes get fed up with memecoins to the point of fleeing them at a certain point. Indeed, after a period of euphoria where these meme cryptos saw their values skyrocket, a brutal correction hit the market.

Data from Santiment, relayed by FX Street, show that memecoins lost about 30% of their value in June, affected by factors such as the massive BTC sell-off by the German and US governments, and repayments to Mt. Gox creditors.

Flagship cryptos like Dogwifhat (WIF), Shiba Inu, BRETT, and MOG have also experienced significant declines.

Recent evolution of meme cryptos:

• Dogwifhat (WIF): -61% since March 31;
• Dogecoin (DOGE): -50% from its annual high;
• Shiba Inu (SHIB): -57% from its peak;
• Brett (BRETT) and MOG Coin (MOG): also affected, at -30%, though less publicized.

Experienced traders know that memecoins are often the first to suffer during market fluctuations due to their speculative nature and low capitalization.

With declining hopes of a bullish reversal, many investors now prefer to secure their profits or limit their losses. Crypto analyst @Ali_charts even suggested on X that the bullish cycle of memecoins might be over, signaling a phase of market complacency.

The impact of celebrity crypto launches

Meanwhile, the rise in popularity of the Pump.fun platform by Solana, specializing in the generation of celebrity tokens, has also played a crucial role in the decline of traditional memecoins.

Traders have been attracted by these new meme cryptos, siphoning liquidity from existing projects.

Pump.fun has facilitated the creation of new coins in a snap, thus increasing competition and diluting interest in established memecoins.

Investors are now turning to opportunities perceived as more stable or innovative, leaving behind cryptos with uncontrollable volatility.

Despite this, some traders remain optimistic. According to data from IntoTheBlock, more than 70% of DOGE, PEPE, and FLOKI holders are still in profit despite the recent drop.

However, caution is warranted, as market reversals can be as swift as they are brutal in the world of meme cryptos.