The past few weeks have been a major blow to Bitcoin, with the German government selling off and the massive fears surrounding the Mt. Gox redemption. The crypto market appears to be cooling off after the recent rally, which has seen the Bitcoin (BTC) price soar to a record high of $66,000 this week.
Bitcoin Effect
After recovering from the $54,000 bottom, Bitcoin rallied above the $62,000 support level like there was no tomorrow. Buyers were furious when Bitcoin climbed to $65,000. HHowever, as the market stabilized, BTC fell to $63,500 and has remained in that range ever since.
This led to the biggest losses for meme coins, with Mog Coin (MOG), Shiba Inu (SHIB), and Brett (BRETT) being the worst performers on the day. MOG fell 10.5%, followed by SHIB, down 10.7%, and BRETT leading the way with a 12% drop.
However, while the meme-inspired token looks bearish, the decline was expected, due to the demand seen in the recent rally.
Meme coins are also expected to be the driving force of the anticipated altcoin season. In the past 90 days, both PEPE and BRETT have rallied by over 100%, while MOG has grown by 231%. FLOKI and BONK have not seen such huge gains, but they have been among the top 15 best performing assets over the past three months.
So, as the old adage goes, the bigger the better. But that doesn’t take away from the fact that the market is still poised to grow, and there’s a chance that meme coins could go up since they share a positive correlation with Bitcoin.
For Bitcoin, BRETT has a correlation of 0.65, MOG has a correlation of 0.87, SHIB has a correlation of 0.85, and BONK has a low correlation of 0.67, while PEPE has the highest correlation with BTC at 0.95.
This is a good thing, as if $65,000 turns into support, the meme coin could rise along with Bitcoin, but it is also a disaster. If profit-taking appears in the market, BTC could fall to $63,000, and possibly even $60,000. The same impact was felt by meme coins, which saw their market caps drop from $49 trillion to less than $47 trillion.
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