As crypto traders may recall, meme coins initially began as a joke but in an instant, have now become serious business worth millions and billions. The trend started with Dogecoin (DOGE), which received a serious boost from Elon Musk’s casual tweets, and ever since then, many more meme coins have emerged.Related: Elon Musk’s Advice to Investors: Don’t Risk Everything on DogecoinHowever, are they adding any real value to the crypto markets? On the contrary, do they pose a threat? Industry experts have rung the alarms. 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 reckoning for meme-coins with a particular focus on Dogecoin (DOGE). Merten’s analysis suggests that Dogecoin’s lackluster performance during the recent meme token craze could indicate looming dangers for the broader meme-coin market.
DOGE To Exit The Spotlight?
During the period of a meme-driven frenzy, Dogecoin failed to demonstrate significant upward movement, with any gains achieved swiftly fading away. Merten astutely questions the authenticity and sustainability of the meme-coin trend, hinting at the possibility that the market is being propped up by initial liquidity rather than grounded in substantial value.
Altcoin Trading: Historical Challenges
What adds weight to Merten’s concerns is his observation that Dogecoin’s behavior often serves as a gauge for altcoin trading. Looking back at historical data, he notes that purchasing Dogecoin has been unfavorable since the altcoin market peaked in April and May 2021. Altcoins, in general, tend to underperform against both Bitcoin (BTC) and the US dollar, with favorable trading conditions occurring 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% decline in value over the past 24 hours- clear signs of a fast decline. Dogecoin’s price may be erratic as selling drives it below recent support around $0.0726228307003505 and resistance at $0.0739333058709628.Do meme coins hold actual value or are they a ticking time bomb for traders? Either way, navigate the markets with caution and do your research!