The growing popularity of meme coins may signal the end of the current rise in the cryptocurrency market.
Based on Messari's research on investing in meme coins, Muur encourages investors to think about making a profit.
Messari has identified a pattern in crypto markets that usually starts with large investments in crypto infrastructure projects. According to Muur, this makes sense: bull markets in crypto typically start with BTC platforms or smart contracts, as they offer liquidity, a good risk-reward ratio, and technological innovation. These assets serve as a signal that “cryptocurrency is alive,” attracting speculation and development.
The investment trend then shifts towards more volatile assets such as meme coins. These assets are known for their potential for quick profits.
Meme coins are usually the first to fall, signaling the end of a speculative wave throughout the cryptocurrency market.
There is currently a decline in activity with meme coins, indicating a decrease in trading volume on decentralized exchanges
Messari's research suggests the following investment plan based on this pattern: Buy meme coins when classic DeFi/crypto games start to rise. Then convert your entire portfolio to cash and freeze trading when the number of meme coins exceeds a certain threshold.
The basis of this entire thesis is wrong. Memes were the first to start this cycle, unlike the past. We are now moving into a cycle of higher liquidity with lower interest rates. We are nowhere near the peak,” said one X user.
Other analysts also express skepticism. It is worth paying attention to three main market signals:
1. endorsement of meme coins by celebrities;
2. a surge of new meme coins;
3. stream of screenshots of PnL (profit and loss indicators) on social networks.
The growing celebrity participation in meme coins, with figures such as Caitlyn Jenner, Iggy Azalea and Andrew Tate launching their tokens, reflects past market peaks in 2017 and 2021. Additionally, the creation of over a million new meme coins in April alone indicates extreme speculation in the market. This situation, coupled with the widespread circulation of PnL screenshots, suggests that the market may be approaching an inflection point.
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