Meme coins have continued to lose their value throughout the start of this week (08th May 2023). Out of memes that were sliding, PEPE was concerning for traders since it lost 60% of its value in just a week.
Bitcoin (BTC) has also seen a drop in its value by more than 10% in the last week or so and is now trading at just around $26,000 which is a two-month low. This was seen along with a sizeable reversal in a meme coin sector that was experiencing a bull run in the past few days.
At this point, the biggest cryptocurrency in the world is currently trading at around $26,300 to $26,400 range. This is a level that the coin hasn’t touched since March 17. Bitcoin reached a high for the week on the 10th of May 2023 when it touched the $28,300 mark.
Bitcoin Might Go Down Below the $26,000 mark
According to Laurent Kssis who is a crypto consultant for CEC Capital, Bitcoin might go below the $26,000 mark but for now, it’s well above the bidding price.
He further added there are no clear signs or fundamentals that can sustain Bitcoin’s value at that moment which is a little more concerning for traders. However, he also suggested that it would be a short-term play to have higher BTC holdings on such low levels.
Another analyst at Oanda, Ed Moya, believes that this cryptocurrency might further see a drop in its value until there is more clarity regarding the U.S. regulatory laws.
Downward Trajectory of Ethereum
Apart from Bitcoin, Ether (ETH) was also experiencing a downward trajectory. While this cryptocurrency was lower for the week, it did manage to outperform Bitcoin by a slight margin.
As of 12th May 2023, it is currently trading around the $1,800 to $1,810 range compared to its weekly high of $2,020 that it touched on 6th May 2023.
One of the primary factors that made Bitcoin’s price fall worse was the tumbling prices for a few meme coins. The most notable of them was Pepecoin (PEPE), which lost around 60% of its value in the last week of trade.
Furthermore, the new token “Pepe the Frog” that launched in April has seen a significant rise in its valuation since it touched $1 billion. However, that has now gone down to around $560 million.
Decline in Other Meme Coins
Apart from Pepe, other meme coins that saw a huge decline in their value were Dogecoin (DOGE) and ShibaInu (SHIB), both of them losing around 11% of their value in the past week.
Youwei Yang, who is the chief economist at BTCM pointed out of the hype of the meme coins can be exciting. The bandwagon to have a meme coin persuades everyone to get one.
However, it is only short-lived since the coin would continue to lose its value following a market crash. Yang explained how the correction for the meme coins this week is mainly due to the FOMO (fear of missing out) feeling dying out.
The main thing that most experts have noticed with meme coins is that there is no fundamental analysis that causes the prices to go up or down. It is just the hype that can lead to price fluctuations in the coin.
A new coin that is based on any current trends is more likely going to receive a lot of response in the starting period.However, it would soon die out as people will forget about the trend sooner or later.
Once that happens, there is an increased supply of the coin in the market with more and more people unloading it. As a result, it can cause the price of that meme coin to go down by a significant margin.