Beercoin, the highly popular Solana meme coin, has slumped hard in the past few days. After peaking at $0.00057 this month, it has slumped by over 68% to trade at $0.00018. This crash has brought its market cap to over $100 million, down from its peak of $282 million.
Beercoin’s token crash is in line with the ongoing downtrend in the crypto industry. Bitcoin traded below $66,000 on Monday while most altcoins were down by over 10% over the past 24 hours.
A likely reason for the sell-off is last week’s Federal Reserve decision in which officials pointed to just one rate cut this year. Many believe that the Fed will not cut rates at all this year as inflation remaines stubbornly high.
Cryptocurrencies, especially meme coins like Beercoin are expected to underperform when the Fed is extremely hawkish. Beercoin is also plunging as some of its biggest whales continue dumping the token. Data analyzed by LookOnChain shows that an insider sold tokens worth over 5.4 billion on Sunday.
Another wallet related to the #beercoin team sold 5.43B $BEER for $1.13M!Although it has been transferred many times, we traced that the wallet received $BEER directly from the #beercoin team wallet "7yfvQX…o9v394" and "8VY4LF…fDd5G2".https://t.co/vElDToYi5C pic.twitter.com/oYp41d3Naz
— Lookonchain (@lookonchain) June 16, 2024
The insider was not alone as another insider dumped 5 billion tokens worth $1.08 million on the same day. And on Friday, another pre-sale participant sold the $BEER token for a profit of $1.3 million. As this was happening, the official X account was promoting the token.
Insider sales is one of the most obvious red flags in the investment universe since these individuals have more knowledge and insight about their entities.
Beercoin price forecast
I expressed a neutral outlook for the BEER coin in my last forecast and warned that it could drop as holders started to take profits.
This prediction was correct as the token has plunged by over 50% since then. On the three-hour chart, we see that the Beercoin token peaked at $0.00056 last week and then tumbled amid significant insider sales.
It has plunged below the key support level at $0.00033, its lowest swing on June 6th. Also, the coin has remained below the 25-period and 50-period moving averages. It has found a strong support at $0.000015.
Therefore, Beercoin price will likely have a bearish breakout as sellers target the key support at $0.000080, its lowest swing on June 13th.