Cryptocurrency

Pepe

Milady Meme Coin

Shiba Inu

ApeCoin

<div class="sg-post-des">
  Meme coins reflect a higher beta to the entire crypto sector, but does their recent 25% price drop signal a deepening bear market for BTC, ETH and large caps? 
</div> 
<div class="cointelegraph"> 
 <p>The recent crypto crash hit meme coins hard, culminating with a 9% drop in total market capitalization from Aug. 14 to Aug. 21. During the same period, Pepe (PEPE), Shiba Inu (SHIB), and ApeCoin (APE) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market or simply reflects lagging performance of meme coins.</p> 
 <figure> 
  <img src="https://cdn.thebittimes.com/images/2023/08/23/b75354e1042db78d6fb1de0908d0b0b7.webp"> 
  <figcaption style="text-align: center;"> <em>Total crypto cap (blue) vs. Pepe/USDT (green), Shiba/USDT (red), Apecoin/USDT (orange), August 2023. Source: TradingView</em> 
  </figcaption> 
 </figure> 
 <p>Meme coins, like Dogecoin (DOGE), burst onto the scene driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins. Their speculative nature leads to rapid price changes and volatility.</p> 
 <p>Furthermore, the meme coin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.</p> 
 <h2 id="capital-rotates-as-investors-shift-their-attention-to-new-trends">Capital rotates as investors shift their attention to new trends</h2> 
 <p>For traders, the mid-August crypto market crash was a stark reminder of meme coin volatility. Many of these coins emerged in the last six months, like PEPE, HarryPotterObamaSonic10Inu (BITCOIN) , and Milady Meme Coin (LADYS). This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape. </p> 
 <p>However, this underperformance is typical for meme coins, as seen in the past, like when APE), SHIB, and PEPE lagged the total <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a> <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> by 18% between June 5 and June 15.</p> 
 <figure> 
  <img src="https://cdn.thebittimes.com/images/2023/08/23/e404080f4dcbfba6214036fdc278d542.webp"> 
  <figcaption style="text-align: center;"> <em>Total crypto cap (blue) vs. Pepe/USDT (green), Shiba/USDT (red), Apecoin/USDT (orange), June 2023. Source: TradingView</em> 
  </figcaption> 
 </figure> 
 <p>These two instances don't necessarily mean meme coins will always perform worse than the broader crypto market. They reflect a higher beta in the sector, where meme coins tend to exaggerate market movements. Despite this, it's uncertain if excessive price drops are a backward-looking phenomenon or signal a market reversion.</p> 
 <p>Contrary to expectations, meme coins can also lag during bull markets. For instance, between March 13 and March 30, meme coins fell while the total crypto cap gained 17.5%. </p> 
 <figure> 
  <img src="https://cdn.thebittimes.com/images/2023/08/23/1de02856c94161190ec0e50b273ff655.webp"> 
  <figcaption style="text-align: center;"> <em>Total crypto cap (blue) vs. Floki/USDT (green), Shiba/USDT (red), Apecoin/USDT (orange), March 2023. Source: TradingView</em> 
  </figcaption> 
 </figure> 
 <p>After looking at the two most recent instances of meme coin underperformance, it's crucial to examine their aftermath. This entails determining whether the price drop hinted at a possible market bottom or if it merely signaled investors shifting their attention to other cryptocurrencies.</p> 
 <figure> 
  <img src="https://cdn.thebittimes.com/images/2023/08/23/39285bdf45761ce2bc91629b072a850b.webp"> 
  <figcaption style="text-align: center;"> <em>Cryptocurrency market total capitalization, USD. Source: TradingView</em> 
  </figcaption> 
 </figure> 
 <h2 id="despite-the-bullish-evidence-external-factors-influence-meme-coin-price-action">Despite the bullish evidence, external factors influence meme coin price action</h2> 
 <p>Following the mid-June and late March period where meme coins underperformed, the overall <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> capitalization either remained steady or experienced notable gains in the subsequent weeks. Numerous factors could have influenced investor sentiment during these periods. For instance, the sentiment might have been influenced by BlackRock's application for a Bitcoin exchange-traded fund (ETF) on June 15.</p> 
 <p>Similarly, on March 31, BTC options worth $4.2 billion expired. This event was seen as a potential catalyst for Bitcoin (BTC) to strengthen its $28,000 support level. This was due to a notable imbalance between call (buy) options and put (sell) instruments, with call options surpassing put options by $1.2 billion. This likely favored Bitcoin bulls and could have led them to utilize profits from the expiry to bolster the BTC price.</p> 
 <p>However, since neither of the last two sharp corrections in meme coins were succeeded by broader <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currency <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> declines, the possibility of Bitcoin finding support around $26,000 remains a possibility. Nevertheless, as evident from the ETF and options expiry incidents, <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> trends and meme coin price action are primarily steered by news and events. </p> 
 <template data-name="subscription_form" data-type="markets_outlook"></template> 
 <p class="post-content__disclaimer">This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph. </p> 
</div>

Is the 25% drop in PEPE, SHIB and APE a sign of a deepening crypto bear market?

Table of Contents

TheBitTimes

Other articles published on Aug 22, 2023

Cardano NFT Floor Price Increases , BTCX Token Shines as a Beacon of Trust in the Shadow for ADA ...

The BRICS Bank’s Ambitious Quest for De-dollarization

Shiba Inu Dev Drops Bombshell Shibarium Update

Dutch Cryptocurrency Platform Finst Passes Proof-of-Reserves Audit!

Ripple CTO Stuns XRP Army With His Recent Tweet: 'XRP Fixes This'

Coinbase taps Coinrule for automation on advanced trading platform

Join our free newsletter for daily crypto updates!