Over the past week, Bitcoin (BTC) has experienced a 10% drop, reaching a two-month low of around $26,000. This decline was accompanied by a significant reversal in the memecoin sector, which was previously red-hot. At the time of reporting, Bitcoin is trading at roughly $26,300, a level unseen since March 17. According to Laurent Kssis, a crypto advisor at CEC Capital, Bitcoin may fall below $26,000 over the weekend, but it is well-bid at the moment. He added that despite the lack of fundamentals supporting Bitcoin, traders may be using the lower level as a short-term play to increase BTC holdings.
Furthermore, Ed Moya, an analyst at Oanda, believes that Bitcoin will continue to face downside pressure until there is regulatory clarity in the United States. The week also saw Ether (ETH) drop in value, albeit outperforming Bitcoin slightly. ETH is now trading at around $1,770, versus its weekly high of $2,020.
Contributing to the bearish mood in Bitcoin are the falling prices of some memecoins, such as Pepecoin (PEPE), which has decreased by over 60% in the past week. Pepecoin, introduced in April and based on “Pepe the Frog,” quickly reached a valuation of over $1 billion which has since been reduced to approximately $560 million.
Other memecoins experiencing declines include Dogecoin (DOGE) and Shiba Inu (SHIB), each losing about 11% over the last seven days. Youwei Yang, Chief Economist at publicly-traded bitcoin mining company BTCM, explained that the memecoin hype often leads to a market crash, as seen with DOGE and SHIB two years ago. He added that the recent market correction for memecoins is mainly due to the decreasing FOMO sentiment associated with these new tokens.
Altcoins have also been affected by the market sell-off, with Aptos’ (APT) losing 20%, and Filecoin (FIL) and Aribitrum’s (ARB) each dropping around 17%. As the market continues to experience fluctuations, it becomes increasingly important for investors and traders to understand the underlying factors driving the price movements and exercise caution when making decisions in this rapidly evolving space.
Source: Coindesk
