In the period since December 9th, there has been a significant 39.4% decline in the market capitalization of memecoins. The price trends for most memecoins have been consistently downward over the previous month.
The market volatility of Bitcoin [BTC] around the $100k level has had a notable impact on the altcoin market, subsequently affecting meme coins as well.
Despite the launch of Official Trump [TRUMP], there was little relief from the ongoing market stress. Investors were enticed to offload their other meme coin holdings and switch to TRUMP as its price experienced a sudden and steep increase.
However, following its peak at $73.43 on January 19th, TRUMP too witnessed a significant downturn, plummeting by 71% in just a fortnight.
TRUMP has now fallen below its recent trading range, hinting at the possibility of further declines. Additionally, the A/D indicator did not provide much encouragement amid this scenario.
Given TRUMP’s recent price behavior, it may discourage potential investors from considering meme coins in the immediate future.
Can Dogecoin Spearhead the Memecoin Market Revival?
As the leading memecoin in terms of market capitalization, Dogecoin [DOGE] holds significance as an indicator of the overall health of the meme coin sector.
Presently, DOGE exhibits a +0.89 correlation with Shiba Inu [SHIB], underscoring the close relationship between the performance of major memecoins and the market leader.
According to the provided Santiment data, DOGE has consistently maintained a higher social dominance compared to SHIB or Pepe [PEPE].
Social dominance signifies the percentage of a coin’s mentions across various social media platforms.
The on-chain metrics portray a bullish stance. There is no significant movement in dormant circulating tokens, which typically precedes a wave of selling pressure.
Moreover, the average coin age has been steadily increasing over the past six weeks despite the lack of an upward price trend.
The 60-day MVRV stands at a negative value, indicating that short to medium-term holders are currently facing losses. Nonetheless, when considered together, these metrics offer a potential buying opportunity signal.
Looking at the orderbook data, crucial support and resistance levels for the upcoming days are highlighted. Notably, there is a notable concentration of limit buy orders at round numbers such as $0.28, $0.27, and $0.26, suggesting that the price might gravitate towards these levels before any reversal occurs.
The imbalance in order distribution leans towards buyers within a 10% range around the current price, bolstering the probability of a bullish short-term reversal.