Meme Coins Suffer as Bitcoin Fails to Secure $65,000 Support
cryptonewsz.com 19 July 2024 05:42, UTC Recent weeks proved severe for Bitcoin due to the immense fear caused by the German Government Sell-off and Mt. Gox repayments. It looks like the crypto market is cooling down following the recent rally, which pushed Bitcoin’s (BTC) price to $66,000 during the week’s high.
The Bitcoin Effect
After recovering from the depths of $54,000, Bitcoin rallied like there’s no tomorrow all the way above the $62,000 support. Buyers raged as Bitcoin crossed all the way over to $65,000. However, as the market stabilized, BTC dropped to $63,500 and has remained in that range since.
This resulted in the meme coins taking the biggest hit, with Mog Coin (MOG), Shiba Inu (SHIB), and Brett (BRETT) emerging as the worst performers of the day. MOG declined by 10.5%, followed by SHIB, falling by 10.7%, and BRETT leading the meme coin drawdown with a 12% drop.
However, while the situation does appear to be bearish for the meme-inspired tokens, this drawdown was expected. The reason behind this is the demand that they witnessed during the recent rally.
Meme coins are also expected to be the driving force behind the highly anticipated altcoin season. Over the last 90 days, the likes of PEPE and BRETT have all registered rallies exceeding 100%, with MOG noting a 231% growth. While FLOKI and BONK did not register such spectacular gains, they were still among the top 15 best-performing assets over the last three months.
Thus, as the old adage goes, the bigger they are, the harder they fall. However, this does not take away from the fact that the market is still ripe for growth, and with the meme coins sharing a positive correlation with Bitcoin, their rise is also on the cards.
With Bitcoin, BRETT has a correlation of 0.65; MOG stands at 0.87; SHIB is noting a 0.85 correlation; BONK is at a low 0.67, while PEPE has the highest correlation with BTC of 0.95.
While this is a boon, as meme coins could rise along with Bitcoin once $65,000 is flipped into support, it is also a bane. Should profit-taking emerge in the market, BTC could drop to $63,000, potentially even slipping to $60,000. The impact of the same could be felt by the meme coins with their market capitalization dropping from $49 trillion to $47 trillion or lower.
