The memecoin, in particular Pepe and Dogwifhat, have recorded a significant increase, surpassing BTC, ETH, and SOL.
This sector, valued at 53 billion dollars, saw a growth of 12% on Tuesday, with Pepe (PEPE) and Dogwifhat (WIF) increasing by 22% and 25% respectively, according to CoinGecko.
Let’s see all the details below.
An impressive rally for the memecoins: Pepe and Dogwifhat in the lead
As anticipated, the memecoins have outperformed BTC, ETH, and SOL, with a increase in the sector of 12%. Pepe (PEPE) and Dogwifhat (WIF) have led the rally with growths of 22% and 25%.
The rally occurred after Bitcoin reached a monthly high of $65,000 before dropping to $63,000.
This movement suggests that traders are taking profits from higher capitalization assets like BTC and ETH to invest them in more speculative bets.
The CoinDesk 20 (CD20) index, which monitors large-cap tokens, recorded an increase of 2.3% in the last 24 hours.
Various meme coins related to American politics were issued after the presidential candidate Donald Trump was injured in a shooting during a rally in Pennsylvania last Saturday.
Among these, America Coin (USA) and Super Trump (STRUMP) have seen increases of 204% and 43%, respectively.
Volatility and liquidity of memecoin
The meme coin historically perform well when BTC and ETH are range bound near local highs and perform poorly during market downturns.
For example, Dogwifhat rose by 60% in May while BTC was trading between $66,000 and $69,000, only to lose 60% of its value in the 30 days following a market crash that saw BTC drop by 21%.
The current market depth of BTC on Binance ranges between 14.8 million dollars and 11.2 million dollars within 2% of the current level. On the other hand, the market depth of WIF is between only 1.4 million dollars and 1 million dollars.
This means that liquidations and market orders can have a much more significant impact on meme coins compared to higher capitalization tokens like BTC and ETH.
The rally of meme coins highlights how traders are diversifying their profits towards more speculative assets, taking advantage of the volatility and relatively low liquidity of these cryptocurrencies.
Pepe reaches a 15-day high with a 23% increase
Pepe has recorded a high of 15 days at $0.00001262, marking a 23% increase in the last 24 hours. During this period, the trading volume has increased by 110%, attracting the attention of investors.
The cryptocurrency had been in a bear phase since the beginning of the month, hitting a two-month low of $0.00000763 in the first week of July. However, in the last 24 hours, PEPE has moved from $0.000009399 to $0.00001251, sparking significant interest.
Two institutions, Nascent and MakerDAO, have moved funds on Binance, depositing 3,566 MKR (equivalent to 10.29 million dollars). Nascent, in particular, sold 1,216 MKR (3.49 million dollars), achieving an estimated profit of 2.9 million dollars.
Subsequently, the venture capital company withdrew from Binance 141 billion PEPE (1.6 million dollars), 281,000 LDO, and 3.41 million USDT.
This surge of PEPE coincides with a relief rally in the cryptocurrency market, which is recovering from recent lows. After two difficult weeks, the market’s Fear & Greed index has returned to neutral territory.
Among the meme coin, PEPE has taken the first place, with Dogwifhat and Floki increasing by 21% and 18% respectively. The network value to transactions (NVT) ratio of PEPE has increased, suggesting that the coin is relatively overvalued.
Analyzing the recent price movements, Pepe has demonstrated a bull trend, surpassing the resistance level of $0.00001134.
Despite some volatility in the last week, the overall trajectory remains positive, with the potential to soon test the $0.00001349 level.
Supporting this optimism is the relative strength index (RSI), which indicates a strong momentum without yet reaching the overbought territory.