Does the 25% Drop in PEPE, SHIB and APE Indicate a Worsening Crypto Bear Market
[TL; DR]
In mid-August the prices of APE, PEPE and SHIB dropped by around 25%.
Change in market sentiments, hype and community enthusiasm can affect prices of memecoins.
memecoins reflect a higher beta in the entire cryptocurrency sector, meaning that they tend to exaggerate price changes.
Introduction
memecoins are a category of cryptocurrencies that have been trending for the past few years. Dogecoin was the first memecoin which paved the way for many other such tokens including Shiba Inu (SHIB), Dogelon Mars, Baby Doge Coin, Floki Inu and Samoyedcoin, among others. Surprisingly, some recently launched memecoins like PEPE have been performing well on the crypto market.
It is important to note that the price performance of meme coins has never been smooth. From time to time, they experience much volatility. This article discusses the impact of the recent 25% fall in the value of PEPE, SHIB and APE on the entire crypto market.
Read also: PEPE Skyrockets By 1000% – How Did This Frog Go Viral?
Altcoin Market Crash Severely Affects Memecoins
memecoins are among the cryptocurrencies which were heavily affected by the altcoin market crash that occurred from 14 to 21 August. PEPE coin, Shiba Inu (SHIB) and APE coin lost about 25%, creating fear that the crypto market may re-enter a strong bear run.
However, some crypto analysts think that the memecoin price decline is a result of the lagging performance. The following diagram depicts the effects of the recent crypto flash crash.
Total Cryptocurrency Market Cap – TradingView
The graph shows the memecoin price drop that occurred during the third week of August. As you notice, SHIB, PEPE and APE coins lost by nearly 25% resulting in a 9.15% decrease in the total crypto market capitalization. Specifically, Shiba Inu price fell by 24.95%, PEPE price by 24.23% and Ape coin price by 25.84%.
Read also: Ape Coin Price Momentum is at Risk Due to Decline in User Acquisition Rate
Capital Rotation: Shift Attention to New Trends
The altcoin market crash that occurred in August showed how volatile memecoins are, even during a bull market. Unfortunately, some of the affected tokens like PEPE and Milady Meme Coin (LADYS) were launched recently. This may cause a negative sentiment against memecoins which may extend the current bearish market.
Another explanation of the recent crash of the memecoin market is that they lagged the crypto market the way APE, SHIB and PEPE did between 5 and 15 June as the next diagram indicates.
PEPE, SHIB and APE Lagged Behind the Rest of the Market - TradingView
The blue line represents the total crypto market cap while green is for PEPE/USDT, red for SHIB/USDT and orange for APE/USDT. Basically, the market cap of the three memecoins (PEPE, SHIB and APE) fell by larger margins than the total market cap.
The reason is simple. The memecoins reflect a higher beta in the entire cryptocurrency sector. What this means is that memecoins tend to exaggerate the price changes. It is not certain if the memecoin price drop signals a market reversion or is a backward-looking scenario.
It is also important to note that memecoins also lag during bull markets. As an example, that scenario occurred between 13 and 30 March when the market capitalization of memecoins fell while that of the total crypto market increased as the next graph indicates.
Total Crypto Market Vs Individual memecoins – TradingView
As observed on The Graph, the market caps of FLOKI/USDT (green), SHIB/USDT (red), and APE/USDT (orange) dropped while the total crypto market capitalization rose. All these examples demonstrate the lagging nature of memecoins when there are market changes. However, we cannot conclude with certainty whether or not the recent 25% memecoin price drop was a case of lagging.
Read also: PEPE Investors are Shifting to Dogecoin, What’s Behind this Trend?
Factors that influence the Price of Memecoins
In most cases, when a memecoin gets on the market it is accompanied by much hype and community enthusiasm. This is because each memecoin is supported by an online community. In addition, memecoins are highly speculative, a reason why their prices can change within a short period. Due to their nature, memecoins raise traders’ hope of generating huge profit during bullish periods.
Even when some memecoins like APE, PEPE and SHIB are bullish several external factors influence their market performance. For example, market sentiments based on developments in the sector may determine the short-term price performance of the tokens. News on trending economic and political issues may also affect their prices.
Read also: Suspense Builds as Shiba Inu (SHIB) Price Awaits Shibarium
For example, during late March and mid-June most memecoins were underperforming resulting in decreasing market caps. However, the rest of the crypto sector either remained stagnant or had some notable gains. For instance, the news of BlackRock’s application for a Bitcoin exchange-traded fund (ETF) helped to steer up prices of several cryptocurrencies, including memecoins.
The news on major crypto events like the expiry of Bitcoin options may also influence prices of many crypto assets including memecoins. To illustrate, the market expected the expiry of Bitcoin options worth $4.2 billion on 31 March to strengthen the critical $28,000 support point since there was an imbalance between call options and put instruments.
In fact, call options surpassed the put options by $1.2 billion. Such a scenario favored the bulls and might have bolstered the price of bitcoin. Consequently, that created a positive price momentum for several cryptocurrencies. Read also how to buy Pepe coin on Gate.io exchange.
Conclusion
During mid-August the total crypto market cap decreased by 9.15% after PEPE, SHIB and APE lost by about 25%. That memecoin price fall could have been a result of lagging performance or a sign of market reversion. However, price changes of memecoins are caused by several factors such as market hype, speculation or crypto-related news.
FAQs for Memecoins
What is PEPE price prediction for 2024?
The current market prediction of PEPE coin shows that it will trade around $0.0000023998 in 2024. Nevertheless, it should be trading close to $0.00000149 by the end of 2023. Currently, PEPE coin is trading at around $ 0.00000079.
What is SHIB price prediction for 2024?
Analysts predict that SHIB will trade within a price range of $0.0000135786 and $0.0000161984 in 2024. By the end of 2023 its price should fluctuate around $0.0000107789.
Relevant article: Shiba Inu (SHIB) Price Prediction 2023-2030
What is APE price prediction for 2024?
In 2024 Ape Coin will likely trade between $3.00 and $3.49. Nevertheless, the APE price in December 2023 is likely to range between $2.05 and $2.32. It is currently trading around $1.40. Read also how to buy APE coin on Gate.IO.
Related article: APE coin price predictions
What are the 5 memecoins?
Dogecoin (DOGE), Shiba Inu, PEPE, BabyDogeCoin and Floki Inu (Floki) are the top 5 memecoins based on market capitalization. Although Doge coin is the top memecoin, overall it is ranked number 9 while Shiba Inu is number 16.
