Dogecoin and Shiba Inu seem to have borne the brunt of the recent price crashes in the market. Reports have shown that the trading volume of the crypto market fell over 40% last month. Numbers taken from top exchanges saw the volume traded in June being significantly lower than that in May. Prices followed the lead of bitcoin which had finally fallen to the $28,000 threshold the same month. Before then rising back up to reclaim over $30,000.
Despite the recovery, the damage seemed to have been done already. The market which had been in a two-month-long recovery continued to suffer price dips. The number 2 coin ethereum saw prices fall below $2,000. Following this, meme coins have not been left out of the carnage it seemed. Even suffering the most significant losses as sell-offs continue in the market.
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This opens up questions about why meme coins seem to have it the worst. While top coins fall in the single and low double digits, meme coins have seen mid to high double digits dips.
Why Are Meme Coins Suffering The Most?
A good place to start would be to look at the growth of meme coins against other coins. Meme coins have so far outperformed most other coins in terms of short-term growth. It only makes sense then that more people would be selling off coins to take out the massive profits they have acquired.
Coins like Dogecoin and Shiba Inu have seen incredible growth in less than a year. Dogecoin which started out the year at $0.01 now currently trades for $0.1947 currently. Trading over 1,000 percent of its price at the start of the year.
Dogecoin price up over 1,000% from the beginning of 2021 | Source: DOGEUSD on TradingView.com
Also, the highly volatile nature of these coins makes them susceptible to wild movements. This is a good thing when it comes to the price of the coins going up. But also can go the other way when the price is going down.
The price of meme coins going up in value also means that they get into overpriced territory quite quickly. And thus, they tend to experience sharper and harsher price corrections in a shorter amount of time.
Dogecoin, Shiba Inu, And A Looming Bear Market
The report from CryptoCompare showed that trading volumes were generally down across the board. Exchanges recorded massive losses in trade volumes in June. Prices of meme coins have seen continued dips. Dogecoin is currently down over 10% in the past week.
Shiba Inu (SHIB) shows the same movement. Closely following the price movements of Dogecoin.
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These low volumes were attributed to the declining prices of cryptos and low volatility presently in the market. On the heels of this also follows massive FUDs haunting cryptos. Things like China crackdowns on mining, low hash rate due to miners having to move.
There’s a continually looming fear that the entire crypto market is headed for a bear market. To some people, the bear is already here and investors are just yet to catch up.
Featured image from Crypto.IQ, chart from TradingView.com