DOGE, SHIB and PEPE record notable declines, fueled by the bearish trends in the altcoin market.
- The overall memecoin market plunged, led by DOGE, SHIB, and PEPE. Technical analysis shows potential further declines for the altcoin market.
The cryptocurrency market has witnessed significant fluctuations recently, with meme coins experiencing a notable downturn.
These whimsically themed cryptocurrencies, often inspired by internet memes and jokes, have seen a collective market cap reduction to $54.5 billion, a 3.3% decline just in the past day.
Despite their typically volatile nature, the decline has been sharp and influenced primarily by major players such as Dogecoin [DOGE], Shiba Inu [SHIB], and Pepe [PEPE].
After a period of robust growth, where Dogecoin, for instance, surged by 9.8% last week, it along with PEPE faced a downturn exceeding 4% in a single day.
Shiba Inu, on the other hand, has been experiencing a steady decrease over the week, culminating in a 4.5% drop yesterday.
This series of declines has sparked conversations and concerns regarding the sustainability of meme coins in a bearish market.
However, while price performance may bring Shiba Inu as the most red in the top 3 meme coin market, AMBCrypto has recently reported that a projection of $0.000031 being the immediate target for SHIB should the bulls prevail.
Memecoins market shift coming
The downturn in memecoin values coincides with a broader decline in their trading volumes.
According to Dune Analytics, memecoin transaction volumes across major blockchains such as Ethereum [ETH] and Solana [SOL] have plummeted dramatically.
Source: Dune
From a high of nearly $998.55 million in March, the weekly trading volume has shockingly dropped to just $1.6 million as of the 6th of May.
This stark reduction indicates a significant waning of trader interest and confidence in these digital assets.
Looking more closely, individual meme coins have mirrored this trend.
Dogecoin’s trading volume, for instance, halved by 50% over the last two months, while Shiba Inu and PEPE saw their volumes decrease by over 80% and 50% respectively.
This overall market behavior reflects a broader disinterest from investors.
Implications for the broader crypto market
The downturn in meme coins could be a precursor to wider market challenges. Traditionally, bull markets in the cryptocurrency sector are often propelled by a surge in altcoin activities.
However, the recent downturn across the board suggests that bearish trends may continue to dominate the broader crypto landscape.
In technical terms, the TOTAL3 chart — the total market cap of all cryptocurrencies excluding Bitcoin [BTC] and Ethereum, has demonstrated multiple structural breaks to the downside.
This indicates a possible prolonged bearish phase for altcoins.
Source: TradingView
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Furthermore, the altcoin market has recently tested a significant supply zone on the 6-hour chart, marked by a shooting star followed by a bearish engulfing candlestick pattern closing below the shooting star.
This sequence suggests that the altcoin market may continue to face downward pressure until a swing low has been taken out, then, then a potential reversal to the upside might be possible.
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