Crypto Market Exhaustion: Is the Memecoin Hype Slowing Down the Market?
The current narrow price range of $94,000 to $100,000 for Bitcoin (BTC) has confused a lot of market players. Even though the biggest cryptocurrency has a history of exhibiting stair-step price fluctuations—strong directional swings followed by months-long consolidations—this time feels different. Consolidations are typically followed by breakouts. The range, however, has now shrunk. It ranged from $90,000 to $110,000 in December.
Last week’s Consensus Hong Kong attendees agreed, with some notable market makers and industry leaders speculating that the widespread memecoin craze is a major factor in the lull in Bitcoin and the altcoin market as a whole, which resembles the sluggish price action of seven years ago.
The market has been very saturated with memecoin launches, and crypto natives are kind of exhausted by this,
Evgeny Gaevoy, CEO of Wintermute
Will the Memecoin Mania Derail Bitcoin’s Recovery?
According to Gaevoy, traders tend to purchase tokens like President Donald Trump’s TRUMP and Argentine President Javier Milei’s LIBRA token at the expense of other coins, drawing liquidity from more well-known cryptocurrencies. Similar to September-October 2018, when the range narrowed over several weeks and finally settled between $6,000 and $6,400, the current flat BTC price behavior is reminiscent of that period.
The issue isn’t entirely parallel, though. Following a sharp drop from Bitcoin’s then-record high of almost $20,000, which happened during a bear market, provided some justification for the range play as investor confidence declined.
Bitcoin’s Price Dilemma: Will the Memecoin Craze Lead to a Downward Move?
There are differing views on what the price of Bitcoin might do next. The memecoin craze and the strange stability of Bitcoin, according to several Consensus delegates, are unhealthy. They stated that such range plays frequently result in a move to the downside. This was the case in 2018 when the consolidation came to an abrupt halt. However, Gaevoy stated that the positive regulatory news is being overshadowed by the memecoin saturation.
People don’t necessarily appreciate that we have a lot of positive news coming. For example, on the regulatory side, we have all forgotten how bad of an influence the SEC and even CFTC was for the last few years and now that overhang is completely gone. I don’t think it’s being properly priced, So I’m pretty optimistic,
Gaevoy
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