Why is memecoins down today?
Dogecoin (DOGE), Shiba Inu (SHIB) and Dogwifhat (WIF) corrected sharply as the entire crypto market sold off on August 2nd.
According to data from CoinMarketCap, the total market capitalization of memecoins has fallen over the past 10 days, falling 21.5% from $54.70 billion on July 22 to $42.91 billion on August 2.
The total daily trading volume in the memecoin sector decreased by 21% during the same period.
Mog Coin (MOG) has lost 12% of its market value in the last 24 hours. Book of Meme (BOME) followed with a 9% loss, and WIF was third after falling 6% over the same period.
DOGE – the largest meme token by market capitalization – showed a 2.5% price decrease during the day, its price reached $0.1131 with a market value of $16.43 billion. Notably, DOGE currently holds 62% of the total market share of memecoin sectors.
Rival SHIB was flashing red on August 2nd, down 2.13% on the day, reducing its market cap to $8.86 billion, making it the second most popular memecoin.
The weakening structure of the altcoin market weighs on memecoins
The ongoing rebound in memecoins is part of the correction in TOTAL2 – the total market value of all cryptocurrencies excluding Bitcoin (BTC) – which began in July 2022.
According to data from Cointelegraph Markets Pro and TradingView, TOTAL2 fell 13% from a peak of $1.031 trillion on July 22 to $942 billion on August 2. This backoff caused the parallel channel to go down. On the daily chart as shown below.
Traders booked profits when the relative strength index (RSI) on the daily chart reached near overbought levels at 65, indicating that altcoins were overvalued and started a trend reversal or corrective reversal.
Altcoins are still following the bearish trend, and the movement of the RSI from 51 to 35 in the last three days suggests that the market conditions support the bearish side.
TOTAL2 is between $976 billion (200-day exponential moving average (EMA) set) and $1.023 trillion (included in both 50-day and 100-day EMAs), if altcoins fail to outperform mainstream memecoins. , editing may continue over the next few days.
RELATED: MEW, WIF, and Solana memecoins rise on growing network activity
The trading volume of Memecoin is decreasing.
As previously reported by Cointelegraph, the weekly trading volume of memecoin has been decreasing since the beginning of March.
According to data from Dune, memecoin trading flows across all blockchains, including Ethereum and Solana, fell by 86% from $998.55 million in March to $138.25 million in the week ending July 14.
Although its volume increased to $246.5 million from July 15 to July 21 the following week, it fell 28.8% to $175.3 million last week. This shows that traders' interest or confidence in the sector has been declining recently.
Looking at individual memecoins, historical data from CoinMarketCap shows that DOGE's trading volume dropped by roughly 41% between July 22nd and August 2nd. Similarly, the trading volumes of SHIB and PEPE fell by 23% and 19% over the same period.
Meanwhile, market news, as the fall of approximately 99% of all memecoins on Pump.fun – a Solana memecoin creation tool – to launch, added bearish sentiment in the memecoins sector.
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.
