Meme Coins Plunge 20% as Bitcoin Drops Below $107k

Meme coins have experienced a significant loss of traction in the latest price drop, with many painting a serious red. This decline comes as Bitcoin lost a key holding level of $107k after days of consolidation, triggered by a sharp rejection from a three-week high. Large-cap altcoins are also showing signs of bearishness, which could signal a broader market correction.

Meme coins, in particular, are expected to suffer significant losses as the primary crypto signals a sell-off. Dogecoin, for instance, has dipped below $0.16, with other meme coins posting substantial losses since yesterday. This bearish scenario is further exacerbated by the fact that many meme coins lack fundamental value and are driven primarily by hype and speculation, making them particularly vulnerable to market sentiment and external factors.

Numerous on-chain metrics hint that the market cycle is nearing its top, with major meme coins like Dogecoin, Shiba Inu, and Pepe already trading far from their recent all-time highs after experiencing a huge crash in the first quarter. Although they recovered briefly in the second quarter, they later rolled over due to growing supply. This period marked a new milestone for Bitcoin as it set a new all-time high, but a sudden halt in demand has raised questions about whether it will reclaim that peak. From the look of things, it will likely suspend its bullish momentum following a new sell order targeted at the crucial $100k level.

As Bitcoin usually dictates the mood and direction of the market, the meme coin sector is expected to feel the heat most. Many assets in this sector may collapse to new lows and bottoms as the general market structure enters an overbought condition. Only a few tokens with a strongly driven community base will survive the coming recession.

While some meme tokens like Aura, Vader, Mori, and Bone are reacting negatively to the latest drop, others like Broccoli, Pengu, and Osak are defying market odds with notable gains on both daily and weekly scales. Additionally, trending tokens on Alpha, such as Bobby The Cat, Gold Digger, and Wind, are exploding massively in terms of profits on the decentralized exchange.

The decline in Bitcoin's price and the subsequent sell-off in meme coins have raised concerns about the stability of these speculative assets. While some meme coins may continue to attract buy pressure and show signs of a potential breakout, the overall market sentiment remains uncertain. Investors should approach meme coins with caution, as their lack of intrinsic value and reliance on hype make them particularly vulnerable to market downturns.