Bitcoin Loses 10% on the Week as Memecoins Tumble
Bitcoin (BTC) has experienced a significant decline of over 10% in the past seven days, hitting a two-month low of just above $26,000. The downturn is not limited to Bitcoin as other cryptocurrencies have also suffered a reversal of fortunes. The red-hot memecoin sector, in particular, has seen a sizable drop in prices, with some of the most popular coins shedding more than 10% of their value.
At the time of writing, Bitcoin is trading at around $26,300, a level not seen since March 17. While it briefly rose to $28,300 on Wednesday following softer than expected CPI data, it has since struggled to maintain its momentum. Some analysts believe that BTC might break below $26,000 over the weekend, but there is a sense that it is well bid for now.
According to Laurent Kssis, a crypto advisor at CEC Capital, there are no fundamentals holding BTC up any longer, and traders are concerned about the cryptocurrency’s future. However, he also added that it feels like a short-term play to increase BTC holdings at these lower levels.
Oanda analyst Ed Moya is of the opinion that Bitcoin is still subject to further downside pressure until the U.S. sees regulatory clarity. Until then, it is difficult to predict what the future holds for the world’s largest cryptocurrency.
The tumbling prices of some memecoins, notably pepecoin (PEPE), have contributed to the overall downturn in the cryptocurrency market. PEPE is now lower by more than 60% over the past week of trade. The new token based on “pepe the frog” debuted in April and quickly rose to more than a $1 billion valuation. However, that has now been trimmed to roughly $560 million.
Other memecoins such as dogecoin (DOGE) and Shiba Inu (SHIB) also lost about 11% of their value over the last seven days. Youwei Yang, chief economist at publicly traded bitcoin mining company BTCM, said that the market correction for memecoins this week is largely due to the calm down of the FOMO (fear of missing out) sentiment with these new memecoins. While the hype of meme coins is usually exciting, it is often followed by a market crash, similar to what we saw with DOGE and SHIB two years ago.