The Fear and Greed Index at 74 indicates a market rush and a high probability that every dollar invested will multiply. However, while investors anticipate an influx of new liquidity, this market exuberance has left many top cryptocurrencies overbought. This scenario sets the stage for a critical assessment of meme coins, which, despite their recent popularity, pose significant risks.
Meme cryptos have seen a significant rise, with micro-cap meme tokens surging across various blockchain networks. This surge has increased excitement in the crypto space, especially as large-cap cryptocurrencies remain relatively quiet. However, this trend may not continue. Meme coins often lack the fundamental support that more established cryptocurrencies have, making them very volatile and speculative.
As Bitcoin (BTC USD) shows short-term weakness and other big-cap cryptos stabilize, meme coins could face significant corrections. Traders are flocking to these tokens for quick profits, but the reality is that they can crash just as quickly. It is important to approach these investments with caution and view them as lottery tickets rather than stable assets.
Let’s take a closer look at three meme coins you should sell in June to avoid significant losses.
Dogecoin (DOGE)
Source: Zarko Prusac / Shutterstock.com
Dogecoin (DOGE-USD): Despite its popularity and strong community, Dogecoin often faces significant price fluctuations and lacks the development and use case of more established cryptocurrencies.
Dogecoin experienced one significant price drop up more than 8% this week and trading at $0.1476, with a market cap of over $21 billion, making it the eighth largest cryptocurrency. This decline was partly due to a bearish pattern that DOGE has been in since early May. AMBCrypto reported.
Dogecoin’s value is largely determined by social media trends and celebrity endorsements. This speculative nature can lead to sudden and sharp declines, as demonstrated by the recent bearish breakout from a rising wedge pattern. For investors seeking stability, this volatility can be a major disadvantage.
DOGEs unlimited delivery limit can further complicate matters for long-term investors as there is a limited scarcity model to promote capital growth. Its short-term losses could also deter speculative winners.
Shiba Inu (SHIB)
Source: siberian_horse / Shutterstock.com
Shiba Inu (SHIB USD): Similar to Dogecoin, Shiba Inu has a large following, but is highly speculative and can be very volatile.
SHIB saw a price drop of 4%. Make traders think if this is a good buy-in moment. Technical indicators point to worsening conditions, in part because Bitcoin has been unable to reach new highs amid the Fed’s hawkish interest rate forecasts, as reported by Cryptonews. SHIB could retest its support zone around $0.000018 and potentially provide a buying opportunity.
Even almost a week ago 2 trillion SHIBA tokens were moved within 24 hours. However, according to IntoTheBlock’s indicators, the trading volume of larger whales barely reaches the previous week’s average. There was speculation that this was due to SHIB’s poor market performance.
Volatility indicators show that DOGE is more volatile than Bitcoin and SHIB is more volatile than both due to their different market capitalization and investor psychology. SHIB could be one of the first coins that investors could consider selling if the goal is to reduce the risk of large losses given Bitcoin’s short-term weaknesses.
PepeCoin (PEPE)
Source: Chinnapong / Shutterstock
PepeCoin (PEPE-USD): As a newer meme coin, PepeCoin has experienced rapid price changes and lacks strong fundamentals.
Value of PEPE coin has fallen significantly This week it is currently trading at 0.000011 cents and has a market cap of over $5 billion. The decline is attributed to whales accumulating billions of tokens, which impacts market stability. As reported by, whales have been withdrawing large amounts of PEPE and other tokens from exchanges Techopedics.
The significant price fluctuations of PEPE coin and large-scale whale transactions raise concerns about possible market manipulation. Whales’ ability to influence the market by accumulating or selling large amounts of PEPE can result in artificial price movements, resulting in increased volatility and uncertainty for smaller investors.
The PEPE Coin team is also anonymous, which makes things even more complicated. These insiders can shift the leverage in their favor, making it particularly risky. If someone is determined to buy meme coins, PEPE may not be the best option available for investors.
At the time of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the author, subject to InvestorPlace.com Disclosure Guidelines.
