3 reasons why DOGE, PEPE and other memecoins glow red
Memecoins such as Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe (PEPE) were among the top cryptocurrencies on the market on June 18, a reversal from the rally that lifted the sector last week.
According to data from CoinMarketCap, the total market capitalization of memecoins dropped 11% to $45.31 billion in the last 24 hours. The daily trading volume increased by 79% to 6.25 billion dollars, which shows the extent of the sales pressure.
Dogwifhat (WIF) has declined the most among high-cap memecoins, losing 14.55% of its market value in the last 24 hours. Book Meme (BOME) followed with a 14.3% loss, and Brett (Brett) was placed in third place after a 13% decline in the same period.
Leading memecoins DOGE and SHIB fell 11.4% and 11.5% respectively on the daily chart, while PEPE rose 10%.
Let's take a look at some of the reasons why memecoins are crashing today.
Weakening the market structure
From a historical perspective, the bull market has often been driven by retail investors, with capital flowing from large-cap cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) to altcoins. However, given the current memecoin price correction, Total3 – the total market cap of all cryptocurrencies excluding BTC and ETH – has pulled back after rallying to $720 billion on June 5.
As the chart below shows, Total 3 was down 19% to $582.88 billion at the time of publication. This pullback resulted in a descending parallel channel on the daily chart as shown below.
Traders booked profits as the daily Relative Strength Index (RSI) bounced back from overbought territory before crossing 70 following a rally in Ethereum-based memecoins that saw PEPE hit a new all-time high.
An RSI reading of around 70 means that altcoins have been overvalued, thus initiating a trend reversal or corrective reversal.
From a technical point of view, altcoins are still supported by the sealed extended downtrend, in the descending parallel channel of Total3. The RSI value has moved from 62 to 30 in the past two weeks, indicating that the bears are controlling the market.
If Total3 fails to break above the middle boundary of the descending channel at $600 billion, altcoins, including major memecoins, may continue to fall over the next few days.
Decrease in the trading volume of memecoin
As previously reported by Cointelegraph, Memecoin's weekly trading volume has been declining since early March.
According to data from Dune Analytics, memecoin transactions have dropped by 97% across all blockchains, including Ethereum and Solana. sector continues to decline.
Looking at individual memecoins, historical data from CoinMarketCap shows that DOGE trading volume decreased by approximately 41% between April 17th and June 17th.
Massive crypto liquidation comes with the memecoin crash
Futures market data from CoinGlass shows that the ongoing crypto market collapse has wiped out more than $434 million in leveraged positions in the past 24 hours, with over $60.22 million in DOGE and over $22.6 million in SHIB accounting for most of the liquidity. memecoins.
Similarly, more than $4.4 million in PEPE lengths and $2.3 million in WIF lengths were resolved at the same time.
More than 160,826 traders have been evacuated in the last 24 hours, with the largest single liquidation occurring on Binance, a $6.44 million trade in ETH/USDC.
Crypto prices, including memecoins, are adversely affected when long derivative positions decline without buying pressure from trading volume.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
