Memecoin, like Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE), was among the cryptocurrencies that underperformed the market on June 18, showing a departure from the momentum that had driven the sector higher last week.
According to data from CoinMarketCap, Memcoin’s overall market capitalization fell 11% over the past 24 hours to $45.31 billion. Daily trading volume rose 79% to $6.25 billion, indicating strong selling pressure.
Dogwifhat (WIF) has fallen the most among the top memecoins, losing 14.55% of its market value over the past 24 hours. Book of Meme (BOME) followed, down 14.3%, while Brett (BRETT) came in third after falling 13% over the same period.
Major memecoins DOGE and SHIB fell 11.4% and 11.5% respectively on the daily chart, while PEPE plummeted 10%.
Let’s take a look at some of the reasons why memecoins are plummeting today.
weakening market structure
From a historical perspective, bull markets are typically driven by retail investors rotating capital from large cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) into altcoins. However, due to the current memecoin price correction, Total3, the total market capitalization of all cryptocurrencies excluding BTC and ETH, has declined after rebounding to $720 billion on June 5.
The chart below shows that Total3 has declined 19% since then to $582.88 billion at the time of publication. This downtrend has resulted in the emergence of a descending parallel channel on the daily chart, as shown below.
Traders booked profits following a rally in the Ethereum-based memecoin that saw PEPE hit a record high, with the daily Relative Strength Index (RSI) breaking out of overbought territory just before crossing 70.
If the RSI number is close to 70, it means that the altcoin is overvalued and is embarking on a trend reversal or downward correction.
From a technical perspective, the altcoin is still locked in an extended downtrend, which is confirmed by the downward movement of Total3 within a descending parallel channel. The value of RSI has increased from 62 to 30 over the past two weeks, suggesting that bears are dominating the market.
If Total3 fails to rise above $600 billion, the middle boundary of the descending channel, altcoins, including major memecoins, could continue to sell off in the coming days.
Memecoin trading volume decreases
As Cointelegraph previously reported, Memecoin weekly trading volume has been declining since early March.
Data from Dune Analytics shows that memecoin transactions across all blockchains, including Ethereum and Solana, fell a total of 97% in the week ending June 14, from a March high of approximately $996.7 million to $30.35 million. This suggests interest or trust from traders. The sector continued to decline.
Looking at individual memecoins, historical data from CoinMarketCap shows DOGE’s trading volume decreased by approximately 41% from April 17 to June 17. Likewise, SHIB and PEPE’s trading volumes decreased by 68% and 34% respectively during the same period.
Massive cryptocurrency liquidation due to Memecoin crash
According to futures market data from CoinGlass, the ongoing cryptocurrency market decline has resulted in the loss of more than $434 million from leveraged positions, more than $60.22 million from DOGE longs and $22.6 million from SHIB longs in the last 24 hours. took up most of it. Meme Coin.
Likewise, more than $4.4 million in PEPE purchases and $2.3 million in WIF purchases were liquidated during the same period.
Over 160,826 traders were liquidated in the last 24 hours, with the largest single liquidation on Binance involving $6.44 million worth of ETH/USDC trades.
Cryptocurrency prices, including MEMCOIN, are negatively affected when long-term derivative positions are liquidated without buying pressure from trading volume.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.