As crypto traders may recall, meme coins initially started as a joke, but in the blink of an eye have grown into a serious business worth millions and billions. The trend started with Dogecoin (DOGE), which got a serious boost from Elon Musk’s casual tweets, and many more meme coins have appeared since then.
Related: Elon Musk’s Advice to Investors: Don’t Risk Everything on Dogecoin
However, do they add any real value to the crypto markets? Are they actually a threat? Industry experts have sounded the alarm. Read on to know why.
Memecoins: Hype vs Reality
In a recent video update, esteemed crypto analyst Nicholas Merten, known for his widely-followed YouTube channel DataDash, has raised a red flag for traders, shedding light on a potential meme coin reckoning with a particular focus on Dogecoin (DOGE). Merten’s analysis suggests that Dogecoin’s lackluster performance during the recent meme token craze may indicate impending dangers to the broader meme coin market.
DOGE to leave the spotlight?
During the period of a meme-driven frenzy, Dogecoin failed to show any significant upward movement, with any gains it achieved quickly fading away. Merten astutely questions the authenticity and sustainability of the meme coin trend, hinting at the possibility that the market is supported by initial liquidity rather than being grounded in substantial value.
Altcoin Trading: Historical Challenges
Adding to Merten’s concerns is his observation that Dogecoin’s behavior often serves as a benchmark for altcoin trading. Looking back at historical data, he notes that Dogecoin buying has been unfavorable since the altcoin market peaked in April and May 2021. Altcoins have generally underperformed against both Bitcoin (BTC) and the US dollar, with favorable trading conditions that occur sporadically. during bull markets and altcoin cycles.
Bearish outlook for DOGE
At the time of writing, Dogecoin is trading at $0.0706, indicating a 3.2% drop in value over the past 24 hours – clear signs of a rapid decline. The price of Dogecoin could be erratic as the sell takes it below recent support around $0.0726228307003505 and resistance at $0.0739333058709628.
Do meme coins have real value or are they a ticking time bomb for traders? Either way, navigate the markets with caution and do your research!