A significant downturn in the dominance of meme coins, including SHIB, FLOKI, DOGE, and PEPE, occurred over the past two months, according to recent data from CryptoQuant. Despite experiencing short-term gains within the last 24 hours, these coins have posted negative returns for the past week, underscoring a period of volatility and market uncertainty.
Analysts are increasingly skeptical about the long-term viability of meme coins while showing renewed optimism towards Bitcoin. CryptoQuant’s CEO suggests a potential shift in the crypto community’s focus from speculative meme coins to fundamental cryptocurrency aspects, mirroring trends observed in previous years.
CoinGecko data indicates that although meme coins like SHIB, FLOKI, DOGE, and PEPE have recently appreciated in value, but they have suffered significant losses over the past week. This decline is paralleled by a reduction in daily active addresses, a crucial on-chain metric, pointing to decreasing user activity and relevance for these assets.
Meme Coin Historical Trends and Future Potential
Prominent crypto analyst Unipcs analysed the historical price movements of SHIB, suggesting that current trends in meme coins might follow similar patterns. In 2021, SHIB experienced two significant bullish runs: a 4,097.88% increase between mid-April and early May, followed by an 85% correction and a prolonged consolidation phase, and another 1,213.00% surge in October.
This pattern of initial explosive growth, sharp correction, and consequent rally is not unique to SHIB. Unipcs observed a similar behavior in other meme coins like FLOKI and PEPE, which suggests that a cyclical pattern can lead to potential future gains.
The cyclical nature of meme coin rallies suggests that the current downturn may not represent a peak. The past behavior of SHIB, which saw significant rebounds after corrections, could serve as a blueprint for predicting future price movements of these meme coins, hinting at substantial upside potential ahead.
Currently, SHIB is trading at a price of $0.00001805, showing a slight daily increase but declined 13.86% and 29.72% over the last week and month, respectively. Technicals provide mixed signals: EMAs and SMAs demonstrate a continuing downward trend while the RSI, CCI, and WPR provide potential buying opportunities and a possible bullish reversal.
The MACD shows a continuing bearish trend, although it may be weakening. Fibonacci Retracement levels present crucial support and resistance with critical supports at about $0.00001627 and $0.00001965 and resistance around $0.00002512 and $0.00002850. Breaking through current resistance levels could pave the way for a sustained uptrend for SHIB.
While the short-term picture for meme coins appears bearish, historical patterns and technical indicators point to promising growth prospects of SHIB and similar assets. Investors are advised to take these cyclical trends and technical signals into consideration when examining their investment strategies.
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