Memecoins Face Sharp Decline Amidst Broader Crypto Market Turbulence
Market Capitalization Takes a Hit
The memecoin sector witnessed a sharp decline in market capitalization, plummeting to a three-week low of $119.6 billion as of December 10. This marks a significant drop from the $120 billion threshold last noted on November 27. The sector’s total market value has decreased by 21% over the last 24 hours, indicating a rapid sell-off and growing investor apprehension.
Amidst this sell-off, the total daily trading volume across the memecoin sector has nearly doubled, highlighting the intensity of the selling pressure and the volatile market conditions.
Leading Memecoins’ Performance
Dogecoin, the largest memecoin by market capitalization, led the downturn with a 5.6% drop over the last 24 hours. Its rival, SHIB, also saw a significant decline, recording a 10.4% loss. In contrast, Ethereum-based Pepe (PEPE) managed to buck the trend slightly, posting a modest gain of 1.7%.
Open Interest Signals Bearish Momentum
Memecoin values declined following a significant drop in open interest (OI) across the sector, with Pnut (PNUT) losing 30%. Open interest, representing the total number of unsettled derivative contracts, serves as a key market sentiment indicator. For memecoins like DOGE, OI fell by over 20% to $3.1 billion, reflecting traders’ bearish sentiment.
Widespread Crypto Liquidations
The broader crypto market has not been spared, with over $1.7 billion in leveraged positions wiped out within the last 24 hours. This includes a staggering $1.3 billion eliminated in just the past 12 hours. Futures tracking smaller altcoins and meme tokens have recorded higher losses compared to those of major cryptocurrencies like BTC or ETH.
Significant liquidations were noted among memecoin traders, with over $72.6 million in DOGE longs and more than $22.35 million in SHIB longs liquidated. This event marks one of the largest liquidation events since 2021 and signals a potentially cautious approach moving forward for investors in this space.
For further insights into the dynamics of the crypto market and to stay updated on the latest trends, consider exploring additional resources such as Crypto Talent Wanted and Navigating the Dance of Crypto Regulation and Recruitment Compliance.
