Meme Coins Face Challenges as Bitcoin Struggles to Hold $65,000 Level
In recent times, meme coins have experienced significant setbacks due to concerns surrounding the German Government Sell-off and Mt. Gox repayments. The crypto market seems to be cooling down after a recent surge pushed Bitcoin’s price to a high of $66,000.
Bitcoin made a recovery from $54,000 and managed to surpass the $62,000 support. Buyers were enthusiastic as Bitcoin reached $65,000. However, as the market stabilized, BTC dropped to $63,500 and has remained within that range since.
This decline has had the most impact on meme coins, with MOG (Mog Coin), SHIB (Shiba Inu), and BRETT being the worst performers. MOG experienced a 10.5% decline, followed by SHIB with a 10.7% drop, and BRETT taking the lead with a 12% decline.
The downturn in meme coins was somewhat anticipated, given the demand they experienced during the recent rally. Meme coins are expected to play a significant role in the upcoming altcoin season, with impressive rallies seen in tokens like PEPE and BRETT, which grew by over 100%, and MOG, which saw a staggering 231% growth in the past 90 days. FLOKI and BONK also performed well and ranked among the top 15 best-performing assets during the same period.
Though meme coins may have experienced a fall after their meteoric rise, it does not diminish the fact that the market still holds potential for growth. Moreover, their positive correlation with Bitcoin suggests that their value could rise further.
BRETT has a correlation of 0.65 with Bitcoin, MOG stands at 0.87, SHIB has a correlation of 0.85, BONK is at a relatively low 0.67, and PEPE boasts the highest correlation with BTC at 0.95.
While this correlation may bode well for meme coins if Bitcoin can hold the $65,000 level as support, it also poses a risk. If profit-taking becomes prevalent in the market, Bitcoin could drop to $63,000, or even further to $60,000. This would likely impact meme coins, potentially causing their market capitalization to drop from $49 trillion to $47 trillion or even lower.