Meme coins have made impressive gains year-to-date. Thus, it dominated most of the cryptocurrency market’s best performances in 2024. However, cryptocurrencies faced a major correction. In the process, they began to cool down with the threat of further losses. Crypto analyst Vinicius Barbosa says overall sentiment has varied greatly, from extremely bullish to slightly bearish. So he states that this could put an end to the hepy of the meme coin. The analyst warns about 2 meme coins in particular.
First place meme coin: Pepe (PEPE)
Pepe (PEPE) gained over 500% in the last 30 days from $ 0.000000115 on February 22. Now, PEPE is losing momentum. It has also returned to a Relative Strength Index (RSI) of 55, similar to a month ago. Despite the loss of power, the price remained high. Therefore, the downtrend seems to be increasing on the daily chart. Currently, PEPE’s market capitalization is over $3 billion. The point is, there’s no solid use case outside of price speculation and being a meme. Price support is at $0.000005927. But there is no other meaningful support between $0.000000115 and that for a 98% drop.
Second most popular meme token: Dogwifhat (WIF)
Dogwifhat (WIF) attracted retail investors to Solana (SOL) Blockchain. cryptokoin.comAs you follow from , he has shown a great performance recently. WIF is up nearly 600% in 30 days while testing support at around $2.0 per token. Like PEPE, dogwifhat investors may eventually decide to realize some of their huge profits. It is possible that this will also create a liquidity shock. Losing the current zone could send the price crashing to a monthly low of $0.29, an 86% crash.
Why should investors stay away from meme coin trading?
The most dangerous aspect of trading meme coins is that without further use, prices can enter a death spiral once the excitement wears off. Investors often invest capital in these tokens with the expectation of selling them at higher prices for the next buyer. Financial experts describe this behavior as the “Great Idiot Theory”. In this context, experts make the following statement:
The Greater Fool Theory is the idea that money can be made during a market bubble by buying overvalued assets and then selling them for a profit. Because it will always be possible to find someone willing to pay a higher price. An investor who embraces the Great Fool Theory will purchase potentially overvalued assets without regard to their fundamental value. This speculative approach is based on the belief that you can make money by gambling on future asset prices and can always find a “bigger fool” who will be willing to pay more than you. Unfortunately, when the bubble eventually bursts (and it always does), there is a massive sell-off that causes a rapid decline in asset values. During this sale, you could lose a large amount of money if you are the one holding the asset and cannot find a buyer.
However, it is not possible to predict cryptocurrencies exactly. More support from celebrities or other news could fuel greed and cause the rally to continue. Therefore, it would be beneficial for investors to stay away from trading PEPE and WIF in an area of possible large pullbacks while higher prices are still possible.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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