Is the 25% drop in PEPE, SHIB and APE a sign of a deepening crypto bear market?

) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market or simply reflects lagging performance of meme coins.Meme coins, like Dogecoin , burst onto the scene driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins.

Furthermore, the meme coin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.For traders, the mid-August crypto market crash was a stark reminder of meme coin volatility. Many of these coins emerged in the last six months, like PEPE, HarryPotterObamaSonic10Inu , and Milady Meme Coin . This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape.

However, this underperformance is typical for meme coins, as seen in the past, like when APE), SHIB, and PEPE lagged the total crypto market by 18% between June 5 and June 15.These two instances don't necessarily mean meme coins will always perform worse than the broader crypto market. They reflect a higher beta in the sector, where meme coins tend to exaggerate market movements.

Contrary to expectations, meme coins can also lag during bull markets. For instance, between March 13 and March 30, meme coins fell while the total crypto cap gained 17.5%.After looking at the two most recent instances of meme coin underperformance, it's crucial to examine their aftermath. This entails determining whether the price drop hinted at a possible market bottom or if it merely signaled investors shifting their attention to other cryptocurrencies.

Following the mid-June and late March period where meme coins underperformed, the overall cryptocurrency market capitalization either remained steady or experienced notable gains in the subsequent weeks. Numerous factors could have influenced investor sentiment during these periods. For instance, the sentiment might have been influenced by

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Fuente: Crypto_Potato - 🏆 568. / 51 Leer más »