The cryptocurrency market is witnessing a significant downturn in the performance of meme coins, with industry leaders Bitcoin (BTC) and Ethereum (ETH) spearheading this trend. As of June 18, meme coins like Dogecoin, Shiba Inu, and Pepe have shown disappointing results, marking one of the sharpest declines in the sector. According to CoinMarketCap data, meme coin volumes fell by 11% over the last 24 hours, reaching $45.31 billion. Despite this drop, daily trading volumes surged by 79% to $6.25 billion, indicating a mass liquidation effort.
Historically Weak Market Trends
Historically, bull markets in the cryptocurrency space begin with BTC and ETH, subsequently affecting altcoins. Given the current market correction, the Total3 index, which excludes BTC and ETH, climbed to $720 billion on June 5 before retreating. Since then, Total3 has plummeted by 19%, standing at $582.88 billion at the time of writing. This decline has resulted in the formation of a descending parallel channel on the daily chart.
During this time, the daily Relative Strength Index (RSI) dropped below the overbought zone, suggesting that investors were taking profits as Ethereum-based meme coins, particularly PEPE, increased in value. A high RSI nearing 70 typically signals that altcoins are overvalued, leading to a market correction or trend reversal.
Meme Coin Trading Volume Declines
In March, meme coins were dominating the market; however, since then, a stark decline has been observed. Data from Dune Analytics indicates that meme coin transactions across all networks, including Ethereum and Solana, plummeted from a peak of $996.7 million in March to $30.35 million by the week ending June 14.
Specifically, Dogecoin (DOGE) experienced a 41% drop in trading volume between April 17 and June 17. Similarly, Shiba Inu (SHIB) and Pepe (PEPE) saw declines of 68% and 34%, respectively.
Key Takeaways
- Investors are liquidating meme coins, leading to increased daily trading volumes despite falling market values.
- High RSI values close to 70 suggest overvaluation, prompting profit-taking among investors.
- Significant declines in meme coin trading volumes have been noted, particularly in DOGE, SHIB, and PEPE.
- The Total3 index, excluding BTC and ETH, fell by 19% since early June, indicating broader market correction.
The technical analysis indicates that the downtrend in altcoins persists, influencing the Total3 indicator to move downward within a descending parallel channel. The RSI also showed a steep decline from 62 to 30 over a fortnight, signaling substantial bearish momentum in the market.
