Cryptocurrency prices remained under pressure on Monday, continuing a trend that has been evident for nearly two weeks.
The sell-off of meme coins continues
Overall, the market capitalization of all meme coins tracked by CoinGecko is over $38 billion, below their previous yearly high of over $68 billion.
A closer look at their charts shows that most of them have a close correlation with each other. All of the tokens mentioned below have fallen in the last five days, retreating over 50% from their highest point this year.
- Bitcoin (BTC) was stuck below $60,000 while most meme coins continued their steep descent.
- The Dogwifhat token (WIF) has fallen for five consecutive days and is down over 51% since its peak this year.
- Similarly, Brett (BRETT), the largest meme coin on the Base blockchain, has been in the red for five days, losing 60% of its all-time value. Long-term holders have lost over $1 billion as the market cap has dropped from over $1.89 billion to $794 million.
- Bonk (BONK), the first Solana (SOL) meme coin, was also one of the worst performing cryptocurrencies on August 17, declining 63% from its March highs.
- Pepe (PEPE) has also fallen to $0.0000071 after several days in a row.
Furthermore, technicals suggest that there is still further downside room for these tokens.
Pepe Death Cross and Head and Shoulders Pattern
Pepe, the most actively traded meme coin, fell below the 50-day moving average on July 31 and the 200-day EMA on August 11. If this downtrend continues, it means Pepe could form a death cross, which often leads to further upside.
In addition, Pepe has formed a head and shoulders pattern, one of the most popular bearish signs in the market.
The main catalyst for these meme coins is Bitcoin, whose price has stalled below $60,000 this week. If Bitcoin continues the downtrend, it means that the meme coins will continue to fall, with most of them eyeing their August lows.
Historically, meme coins tend to show extreme moves towards Bitcoin. For example, Pepe rose over 1,500% between January and March, while Bitcoin rose over 80% in the same period. It has declined over 50%, while BTC has fallen 20% in the same period.
Traders are switching to meme tokens like Pepe, Dogwifhat, Bonk, and Brett when the Bitcoin price rises due to their cheaper price.
Instead of buying Bitcoin, which is trading for nearly $60,000, most traders opt for a token like Pepe, which is selling for $0.0000071. The theory is that these tokens have a greater chance of doubling than Bitcoin.
