The meme coin sector of the cryptocurrency market has recently suffered significant losses amid broader declines across the industry.
The general downturn was magnified last week as cryptocurrencies struggled to maintain positive momentum, largely due to escalating tensions in the Middle East that have unnerved investors.
The conflict’s impact on the crypto market became particularly evident when news surfaced of Iranian fighter drones heading towards Israel.
This development triggered a rapid drop in the value of popular meme coins such as Dogecoin (DOGE), Shiba Inu (SHIB), and Dogwifhat (WIF), each falling by more than 10% within hours.
Meme coins, known for their extreme volatility and susceptibility to market sentiment shifts, derive their value from hype and speculation rather than practical utility or widespread adoption.
This was reflected in a recent 12% decline in the meme coin market over the past 24 hours, as reported by Coinmarketcap.
The downward trend has been persistent, with notable declines in key meme coins since the start of the month.
Over the past week, DOGE, SHIB, WIF, PEPE, and Floki recorded losses of 18%, 23%, 33%, 25%, and 32% respectively.
DOGE, the pioneer among meme coins, experienced a significant setback, dropping to $0.135—the lowest in three weeks—on April 13 at 5:30 pm Eastern Time.
The coin’s trading activity has decreased, with other cryptocurrencies like DOG and DEGEN surpassing its weekly active trader count.
Competitors SHIB and WIF also faced substantial declines, often moving in correlation with DOGE. At the time of this report, SHIB was down 14%, while WIF had decreased by over 11% in just 24 hours.
Similarly, PEPE saw a 14% reduction in its value, continuing a week-long decline, with other coins like FLOKI and BONK experiencing falls of 15% and 11% respectively during the same period.
Market analysis suggests a likely continuation of the selloff in the short term. In times of geopolitical tension and general market instability, investors typically retreat from speculative, high-risk assets.
Data from Coinglass indicated significant reductions in open interest for DOGE, WIF, PEPE, and SHIB, with decreases of 23.91%, 13.78%, 36.62%, and 18.68% respectively, pointing to a withdrawal of capital and a reduction in trading positions.
Despite the current bearish trends, the inherently volatile nature of cryptocurrencies leaves room for meme coins to potentially rebound and enter a bullish phase soon.
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