PEPE is leading the rally in selected altcoins today with double-digit price gains, while the broader market is moving sideways. Meanwhile, Dogecoin and Shiba Inu are also rising. Meme coins are continuing to explode – but what is behind the bullish crypto forecast for the entertaining market segment that has already brought above-average returns all year?
Meme coins show breakout tendencies: This is the reason
Santiment’s analysis of meme coins such as Dogecoin, Pepe, Dogwifhat and Bonk shows typical behavior patterns in volatile markets. According to experts, these coins are currently experiencing small price breakouts initiated by larger wallets. These movements can be interpreted as deliberate market dynamics, in which larger investors try to generate market interest and increase market capitalization through capital inflows. The concept behind this is based on a chain of psychological and market technical effects. First, larger wallets act and create an impression of momentum by increasing prices. This phase often goes unnoticed because the broader market is hesitant to get in early. However, as general interest grows and investors are driven by FOMO, increased buying by retail investors occurs. This phase drives prices further up in the short term. At the same time, larger wallets then use the moment to profitably reduce their positions.
As these players retreat and FOMO subsides, price corrections often occur, wiping out much of the short-term gains.
The further development of the meme coins depends heavily on investors’ willingness to speculate. It will be important to see to what extent FOMO from retail traders continues to drive the market.
🐶🐸😺 Meme coins are quietly having more mini breakouts this weekend. For coins like Dogecoin, Pepe, Dogwifhat, and Bonk, the larger wallets could continue to pump market caps longer until retail FOMO returns. Once the crowd catches wind and get greedy, the larger wallets sell… pic.twitter.com/KD9OeqnaBe
— Santiment (@santimentfeed) December 8, 2024
Retail investors are currently cautious in the crypto market, leaving significant capital on the sidelines. This untapped potential could lead to a new wave of investment as market sentiment improves. Once confidence returns, these funds could significantly revive the market and cause increased price movements. So there still seems to be room for improvement in the meme coin season.
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