Known for their cheerful nature and often animal-themed mascots, the world of meme coin projects has become a battleground between bullish supports and recent market struggles. In a surprising move, Tron DAO founder and Tron CEO Justin Sun threw his weight behind these crypto assets at the Token 2049 conference in Dubai.
Meme coin support from Justin Sun
Sun’s support highlighted the unique qualities of meme coins. By highlighting the power of community and “fair launch” principles, he believes they represent the “first thing” that distinguishes crypto from traditional finance. He even playfully acknowledged the abundance of animal characters used in meme coin branding. This bullish outlook was not unfounded. Sun highlighted the success stories of Dogecoin (DOGE) and Shiba Inu (SHIB), which reached multi-billion dollar valuations despite defying traditional financial benchmarks. He also highlighted the ongoing support of figures like Elon Musk, solidifying Dogecoin’s status as the “top crypto brand.”
However, Sun’s optimism is at odds with the current state of the meme coin market. Despite the belief that every bull cycle has a breakout point, both DOGE and SHIB are suffering significant losses. At the time of writing, DOGE is at $0.1235, down over 11% from the previous day. SHIB did not fare much better, falling over 10% to $0.00002094.
Liquidation in DOGE, PEPE, WIF positions
This decline is further strengthened by the latest data from crypto derivatives platform Coinglass. Data reveals an increase in “long liquidations” in leading meme assets such as DOGE, PEPE, and dogwifhat (WIF). Long liquidations occur when a trader’s leveraged position at a rising price is forced to close due to insufficient funds as the price falls. This indicates a wave of traders exiting their positions out of fear of further losses.
Adding fuel to the fire, DOGE’s Funding Rate, a mechanism in futures contracts, turned negative for the first time this year. This shows that more investors are betting on a price drop, putting more pressure on the meme coin. Similarly, WIF’s Futures Open Interest, which reflects the total value of outstanding futures contracts, has fallen by 60% since April 1, indicating significant trader outflows.
While PEPE’s Futures open interest has increased staggeringly, the negative Funding Rate paints a similar picture. More short sellers are emerging. This general trend paints a worrying picture for the near future of meme coins. Despite the current bearish trend, Sun’s support underscores the underlying potential of meme coins. Their ability to foster strong communities and challenge traditional investment logic cannot be ignored. The coming months will be crucial in determining whether meme coins can weather this storm and emerge stronger or succumb to the pressures of the broader cryptocurrency market.
To be informed about the latest developments, follow us Twitter’in, Facebookin and InstagramFollow on . Telegram And YouTube Join our channel.