Are Meme Coins the First to Be Dumped? When Will the Panic Selling Engulfing Dogecoin and Shiba Inu End?

▲ Meme coins plunge/ChatGPT-generated image ©

As macroeconomic uncertainty batters the cryptocurrency market, the highly volatile “meme coin” sector has been hit hardest, rapidly freezing over. With geopolitical tensions and inflation fears intensifying risk-off sentiment, large-scale capital outflows are accelerating from the liquidity-sensitive meme coin market.

According to CoinMarketCap data as of 8:18 a.m. KST on the 28th, the total market capitalization of meme coins fell 3.72% from the previous day to $30.55 billion. The 24-hour trading volume, a key indicator of market activity, also plunged 12.37% to $3.13 billion, signaling severely weakened investor sentiment. As the overall crypto “Fear & Greed Index” remains at 16, indicating “Extreme Fear,” meme coins with weak fundamentals appear to be the first victims of panic selling.

Major meme coins all traded in the red. Market leader Dogecoin (DOGE) dropped 3.87% from the previous day to $0.09305, slipping completely below the $0.10 level. Shiba Inu (SHIB) and Pepe (PEPE) also declined 3.12% and 4.19%, respectively, struggling to escape clear bearish momentum.

Losses were even more painful among small- and mid-cap meme coins. Pippin (PIPPIN) plunged 24.27%, starkly highlighting the severe volatility risks inherent in meme coins, while Bonk (BONK) and SPX6900 fell 3.66% and 6.85%, respectively. Although a few micro-cap tokens such as Toilet (TOILET) posted speculative surges, they were not strong enough to counter the broader downward trend dominating the market.

The root cause of this meme coin slump lies in the macroeconomic “double whammy” that has dragged down Wall Street. Escalating geopolitical tensions involving Iran, combined with a January U.S. Producer Price Index (PPI) shock that far exceeded market expectations, have weighed heavily on sentiment. Given that meme coins rely more on community fandom and ample market liquidity than intrinsic value, fading expectations of interest rate cuts and spreading market fear inevitably make them one of the first asset classes investors rush to sell.

The outlook for the meme coin market is likely to remain closely tied to the performance of Bitcoin and key macro indicators. In the short term, liquidity may only return to the meme coin sector if Bitcoin stabilizes around the $65,000 level and macroeconomic uncertainty eases to some extent. While meme coins are known for rebounding more explosively than any other asset when sentiment improves, the current “Extreme Fear” environment leaves the risk of further indiscriminate sell-offs looming, requiring heightened risk management from investors.

Disclaimer: This article is for investment reference only and we are not responsible for any investment losses incurred based on it. The content should be interpreted solely for informational purposes.