Dogecoin (DOGE), Shiba Inu (SHIB), and Dogewifat (WIF) plunged on August 2 as the entire cryptocurrency market sold off.
According to data from CoinMarketCap, the total market cap of Memecoin has decreased over the past 10 days, falling 21.5% from $54.7 billion on July 22 to $42.91 billion on August 2.
During the same period, the total daily trading volume across the Mimecoin sector decreased by 21%.
Mog Coin (MOG) was the biggest loser, losing 12% of its market cap over the past 24 hours. Book of Meme (BOME) followed with a 9% drop, while WIF came in third with a 6% drop over the same period.
DOGE, the largest meme token by market cap, saw a 2.5% drop on the day, trading at $0.1131, giving it a market cap of $16.43 billion. It’s worth noting that DOGE currently holds around 62% of the total meme coin market share.
Competitor SHIB was highlighted in red on August 2nd as its stock price fell 2.13%, reducing its market cap to $8.86 billion, solidifying its position as the second most popular meme coin.
Mimecoin falls due to weakening altcoin market structure
Mimecoin’s current plunge is part of a correction in TOTAL2, which represents the market capitalization of all cryptocurrencies excluding Bitcoin (BTC), that began in July 2022.
According to data from Cointelegraph Markets Pro and TradingView, TOTAL2 fell 13% from its high of $1.031 trillion on July 22 to an intraday low of $942 billion on August 2. This decline caused a descending parallel channel to appear on the daily chart, as shown below.
Traders took profits as the Relative Strength Index (RSI) approached overbought conditions at 65 on the daily chart. This suggests that the altcoin is overvalued and therefore in for a trend reversal or corrective pullback.
Altcoins are still in a downtrend, and the RSI has moved from 51 to 35 over the past three days, suggesting that market conditions favor a downtrend.
If TOTAL2 fails to break above the key resistance zone between $976 billion (where the 200-day exponential moving average (EMA) is located) and $1.23 trillion (which is included in both the 50-day and 100-day EMA), altcoins, including major meme coins, could continue to correct in the coming days.
Related: MEW, WIF and Solana memecoins surge as network activity increases
Memecoin trading volume decreases
As previously reported by Cointelegraph, Mimecoin’s weekly trading volume has been declining since early March.
According to Dune data, across all blockchains, including Ethereum and Solana, MIMECoin transaction flow fell 86% from approximately $998.55 million recorded in March to $138.25 million in the week ending July 14.
Volume increased the following week, reaching $246.5 million between July 15 and July 21, but then fell 28.8% last week to $175.3 million, suggesting that traders’ interest or confidence in the sector has waned recently.
Looking at individual Mimecoins, historical data from CoinMarketCap shows that DOGE’s volume fell by around 41% between July 22 and August 2. Similarly, SHIB and Pepe (PEPE)’s volumes fell by 23% and 19% respectively during the same period.
Meanwhile, market news such as Pump.fun (a Solana Mimecoin generation tool) reporting that approximately 99% of all Mimecoins failed to launch added to the bearish sentiment in the Mimecoin sector.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.