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Memecoin Beatdown: Markets Taking a Breather After Heavy Memecoin Run Last Week

April 22, 2023

After a massive surge in low-cap frog-themed coins last week, the markets are a seeing a significant correction with major coins down considerably, and many overnight memecoins are back close to 0.

Person in frog costume in front of a pond
Image courtesy of Unsplash

It's been a bit of a mixed bag this week as some traders have made life-changing gains trading frog themed coins with notables including 1000x+ gains on $PEPE, and massive returns on $KERMIT, $APED, and $WOJAK. Though, the market quickly came to its senses as many early-ins exited positions on these and took massive profits. Combined with the recent run-up on major cryptos, the rest of the market has slid a bit and seems to be taking a breather.

Looking for the Next 1000x Gem?

The fast hype of these memecoins sent many traders into a frenzy looking for the next 1000x shitcoin pump, but the momentum for the most part seems to have subsided on a lot of the hype train coins that launched literally overnight with zero utility. Some of the "larger" memecoins seem to be bouncing back as hopeful traders bought the dip after the big crash. It's hard to say if any will return to their short-lived all-time-highs, but as the market learned a couple years ago from Elon Musk and $DOGE, all it takes is a little influence and a trending hashtag on twitter to send a micro-cap token parabolic.

Diamond-handers still seem to have a lot of faith in some of these memecoins, so it will be interesting to see how this plays out over the next several months and into the post-halvening bullmarket. We can expect some memecoin faithfuls to continue to hold and dollar-cost average, but it will take large retail interest or a few big money moves to keep momentum up. The more likely case is liquidity will flow out of these projects.

Catching the hype and riding a shitcoin swing to the promised land requires being lucky, being exceptionally early, and being patient. Most 1000xers are on a DEX ready to buy when the token contract gets written to the blockchain. Being patient means exiting at a point where exponential profits can be taken. This generally also means riding through several violent and volatile pumps and dips. Any would-be investment guru will always say that "time in the market beats timing the market," except for when you can time the market (the odds are not favorable when trying to time the market, and the results shown in the tweet posted above should not be expected). In fact, this tweet is probably more representative of what happens to memecoin pump chasers. #REKT

How the Rest of the Market is Favoring

According to $BTC is down around 9% on the week. After breaking past the critical resistance above $30k, it's trading around $27.6k at the time of writing. $ETH is also down almost 11% on the seven day. After breaking past a critical resistance at $2k, it's back to trading around $1.85K and appears to be leveling off.

Seven Day Bitcoin Chart
Bitcoin 7D Chart April 16-Apr 22, 2023 Courtesy of CoinMarketCap

Other big coins in the Top 10 are down with $XRP down 9.3%, $ADA down almost 13%, and $MATIC down over 13% as of the time of writing. A lot of smart money are suggesting now is a good time to take advantage of the sale and dollar-cost average in. But as for the week, most of the notable charts are in the red. Some traders got washed out chasing memecoins last week, but it's likely some of that liquidity move into larger cap coins over the course of the next month or so as long as price action moves downward or stays relatively flat.

Today is a Good Day To Buy!

For those implementing a dollar-cost-averaging strategy, this week has offered a generous dip. It makes sense to buy around these levels if any long plays were purchased higher previously in order to reduce cost basis, but this only applies to coins and tokens with demonstrable long-term staying power. We would never recommend 'buying the dip' on memecoins. Low cap projects and projects with no utility or roadmap that are powered by memes, hype, tend to be short-lived, and more people are made bag-holders than millionaires with those types of projects.

If ever you feel concerned that you 'missed the train,' be weary of the FOMO bug and avoid trying to chase the next 1000x memecoin rocket. Keep a level head, only invest what you can afford to lose, and consider adapting a dollar-cost-averaging strategy to reduce your exposure and begin slowly building a bag for when the real bull market gets here. Shitcoins are fun if you enjoy gambling. A good guideline to follow is if you wouldn't take a bundle of money out to your firepit and burn it for your entertainment, don't buy shitcoins because there is a 99.99% chance the outcome will be the same. This is not true for all crypto, so do your research and invest wisely. If you're curious about learning more about different types of crypto projects, be sure to check out some of our write-ups on different types of crypt products, and be sure to check out our crypto ratings. Keep your coins safe, and make sure to take profit if you're up substantially.

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