Bitcoin Flash Crash Drags Meme Coins Down: Doge, Shiba, Pepe

Bitcoin fell to $94,150 on Monday, falling almost 10% below its all-time high of $104,088. The sudden crash was short-lived, but it dragged down altcoins and memecoins like Dogecoin, Shiba Inu, Pepe, Dogwifhat, and Bonk.

The top 10 meme coins ranked by market capitalization have recorded almost double-digit losses in the last 24 hours. As the altcoin season comes to an abrupt end, it remains to be seen whether meme coins will be able to recover from their recent losses and reach the bottom of the cycle.

Bitcoin correction and meme coin price trend

Bitcoin is trading about 6% below its all-time high on Tuesday. The sudden collapse of the largest cryptocurrency has ended the altcoin season. The blockchain central altcoin season index reads 65 on a scale from 0 to 100, meaning the alt season has ended.

Technical indicators are giving mixed signals about where the BTC price is heading; The relative strength index reads 59 and is sloping upwards. However, moving average convergence and divergence indicate the underlying negative momentum of Bitcoin price trend.

Further correction in Bitcoin does not bode well for meme coins, as the decline in the largest cryptocurrency has led to mass liquidations of meme coins and altcoins on derivative exchanges.

BTC/USDT daily price chart | Source: Crypto.news

Meme coins fell sharply in the last 24 hours and while the tokens started to recover in the last hour, the top 10 tokens experienced double-digit corrections.

The meme category erased approximately 15% of its market value in the last 24 hours, falling to $128.26 billion.

CoinGecko’s top 10 meme coins and price changes in 24 hours | Source: CoinGecko Meme coins and Santa Claus rally

While meme coins are leading the gains this altcoin season, it remains to be seen whether “seasonal” gains will push prices even higher. Typically during the Christmas holidays, altcoins tend to rally; This is a result of less activity and relatively lower trading volume on crypto exchanges.

Both factors make it easier for the market to move and prices to fluctuate against low liquidity.

Meme coin price charts show the tokens rising ahead of Christmas in previous examples; If history repeats, meme tokens, led by Dogecoin, could recover lost ground and make a comeback before the end of 2024.

DOGE has rallied almost 350% since the beginning of the year. In the same time period, SHIB, PEPE, WIF and BONK gained 160%, 1,860%, 145% and 180% respectively.

Despite the recent decline in meme coin prices, each of the top five tokens has delivered triple-digit gains for hodlers in 2024. This supports the thesis of a price recovery and year-end rally for the category.

Trump correlation and bullish drivers

New US President Donald Trump and his Government Efficiency Agency, led by tech giant Elon Musk and presidential candidate Vivek Ramaswamy, have acted as key drivers of the meme coin rally this cycle.

Elon Musk’s comments and DOGE’s incorporation were the most important factors in the market for DOGE; Other factors such as capital rotation out of altcoins and altcoin season have caused meme coin prices to rise in the past four weeks.

While the trending tokens every day include several meme coins, DOGE, SHIB, PEPE, WIF and BONK have gained fame as blue chip meme coins. According to CoinGecko data, the market value of the tokens is between $1.21 billion and $15.33 billion.

As the top five cryptocurrencies compete with each other, with Solana battling XRP and Ethereum for market share, meme coins play a pivotal role in the narrative. A report published by 21Shares earlier this week notes that meme coins contribute to a large portion of trading volume on Solana-based decentralized exchanges.

Data from Artemis Terminal shows that as of November 27, meme coins have achieved year-to-date growth of 261%, making them the second best-performing sector in the crypto space, trailing only Real-world assets.

Cryptocurrency exchange platform LBank has identified the top 10 meme coins of 2024, which include tokens that are not considered blue chips but are outperforming the industry.

LBank top 10 trending meme coins | Source: CoinGecko Technical analysis and price targets

Dogecoin is currently trading 22% below its 2024 high of $0.48434 as seen on the DOGE/USDT weekly price chart. The target of the cycle is the May 2021 high of $0.73995, with the key resistance on the path at $0.60000.

The RSI shows that DOGE is currently overvalued, and this is generally considered a sell signal. A short-term correction could send the meme coin into the buy zone between $0.29874 and $0.35740.

The MACD indicates an underlying positive momentum in the DOGE price trend.

DOGE/USDT weekly price chart | Source: Crypto.news

Shiba Inu is down nearly 23% from its Dec. 2 peak of $0.00003343. The momentum indicator MACD shows an underlying positive momentum in the SHIB price trend.

The target for the cycle is $0.00004567, the peak in March 2024; This is approximately 40% above the current price. The buy zone for Shiba Inu is between $0.00001983 and $0.00002259.

SHIB/USDT weekly price chart | Source: Crypto.news

PEPE is currently in the buy zone marked by the 61.8% and 78.6% Fibonacci retracement levels of the upside from the November 4 low of $0.00000771 and the December 9 high of $0.00002836.

The target of the cycle is the 141.4% Fibonacci retracement level at $0.00003691.

PEPE/USDT weekly price chart | Source: Crypto.news

WIF’s target for the cycle is the all-time high of $4,860, with resistance at the April 2024 high of $4,343. The buy zone for sidelined trades lies between the key support levels between $2,438 and $2,649.

The MACD supports the thesis that there could be further increases in the WIF price this cycle; While the RSI is sloping downwards, traders need to keep their eyes peeled for a trend reversal.

WIF/USDT weekly price chart | Source: Crypto.news

BONK is currently in the buy zone between $0.00002786 and $0.00003574. BONK’s target is at the all-time high at $0.00006230, with resistance at $0.00005666. The MACD supports the bullish thesis for BONK price.

The RSI is trending downwards and reading 54, close to the neutral level. BONK may observe a short-term correction before rebounding and rising towards the top of the cycle.

BONK/USDT weekly price chart | Source: Crypto.news Strategic assessment

Bitcoin’s sharp price drop has caused the market value of the meme coin category to drop by almost 15%. Meme tokens often react negatively to corrections in Bitcoin price. Investors need to closely monitor the BTC price trend for declines in meme coin prices this cycle.

Altcoin season is over and meme coins are no longer able to generate profits across different crypto token categories. Investors need to choose meme coins with strong community, liquidity, and relatively high market capitalization to protect against rug-pulling events and unprecedented losses.

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