Meme Coins in the Crypto Market is a Game-Changer
The $53 billion meme coin market had a more than 12% increase on Tuesday, according to CoinGecko data, with popular coins like Pepe and Dogwifhat rising by 24.72% and 22.86%, respectively. The upswing follows Bitcoin’s decline to $63,000 and subsequent recovery to a one-month high of $65,000.
- In contrast to cryptocurrency giants, the CoinDesk 20 Index has increased by 2.3% within the same period, but the meme coin sector surged by 12% on Tuesday.
- When BTC, ETH, and SOL are trading in a range close to local highs, meme coins have historically done well.
- Memes have larger peaks and troughs than crypto majors because of lower liquidity trading pairs.
How BTC and ETH’s Volatility Affects Meme Coins?
Meme coins historically do well when BTC and ETH are rangebound near local highs and perform poorly when the wider market is plunging due to differing levels of liquidity. While BTC fluctuated between $66,000 and $69,000 in May, Dogwifhat had a rise of almost 60%. This was followed by a market collapse in which BTC fell by 21% over the next 30 days, causing WIF to lose 60% of its value.
- Between $14.8 million and $11.2 million, or within 2% of the present level, is the current market depth for BTC on Binance.
- Because of WIF’s extremely shallow market depth, meme coins like WIF might be moved significantly less than more substantial tokens like BTC and ETH through a series of liquidations and market orders.
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