During the current crypto downtrend, memecoins have been hit hard. Although top-ranking memecoins $DOGE, $SHIB, and $PEPE, still have large market caps, are they on a trajectory to zero, or can a renewal of the bull market still send them to higher highs?
Memecoins at the mercy of the market
It’s one thing to look at the state of the Bitcoin price and to be miserable that it is currently collapsing. It’s quite another thing to be holding memecoins and to be losing more than 60% through 2024 and into 2025.
In a rampaging bull market there is no better place to be than a memecoin that everyone else is also getting behind. Memes can fly 100s of percent to the upside in short periods of time, but it must be acknowledged that the opposite can also take place.
The problem with memecoins is that generally they don’t have any backing whatsoever. They are just free-floating tokens that are tossed around on the whim of the market. Of the three memecoins analysed in this article, the teams behind two of them do profess to provide some utility. That said, neither of these appear to be any solid kind of use case.
Is $DOGE ridiculously overvalued?
Dogecoin (DOGE) is the foremost of the memecoins, but that is probably only because it appears to be a great favourite of Elon Musk. The general view is that one day Musk just might turn this coin into a form of payment, perhaps on the X platform, or maybe in one of his other companies.
For a memecoin riding on such a hope and a prayer, a market capitalisation of $25.8 billion does seem ridiculously over-valued. Time will tell if this is indeed the case.
A $DOGE bounce, or a continued bleed?
Source: TradingView
From a technical analysis perspective, it can be seen that the $DOGE price has come down to the deepest of the Fibonacci levels at the 0.786. This also marks quite strong support, so a bounce from here could be a likely occurrence.
If, on the other hand, that $17.8 billion market cap continues to bleed out, the next support levels can be found at $0.14, and then $0.10. The 200-day moving average has been lost, and therefore, a marked turn around in market sentiment needs to happen in order to get $DOGE back on track.
$SHIB at critical horizontal support
Source: TradingView
Shiba Inu (SHIB) is the other memecoin that professes to have some kind of utility, but this appears to be in the shape of a small ecosystem which does not appear to promise anything groundbreaking.
A $7.3 billion market cap is still an enormous sum for this memecoin, and so it will be interesting to see if a full-on recovery can take place.
Currently, the $SHIB price is foundering just above the critical major support level at $0.0000125. If this fails, that $7.3 billion will continue to bleed out, although a bounce from here is a good possibility.
A dramatic change in market sentiment needed by $PEPE
Source: TradingView
$PEPE is the third-biggest memecoin by market cap, with a $2.68 billion valuation. This is still quite some sum of money, and especially when you consider that $PEPE does not profess to have anything backing it whatsoever. It is a puff of wind, a strand of gossamer, a Will-o’-the-wisp.
Only if the degen trading public decide to get behind it again will the price take off. As it stands, the price is currently holding at a last-ditch horizontal support. The $PEPE price will need the market to turn dramatically, and soon, in order for the day to be saved.
A tiny glimpse of salvation might be found in an almost imperceptible cross-up in the Stochastic RSI indicators. If these indicator lines continue to rise, and they pass above the 20.00 level, a rally could get into full swing.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.