Bitcoin
Why Bitcoin’s ‘struggle’ could be good news for memecoins in the market right now
- Bitcoin discussions appear to be waning, with traders now more focused on altcoins
- Memecoin craze is strong, but this could be a warning for traders
Bitcoin [BTC] it retraced almost all of its gains after breaking above the $67K resistance level on May 20. It extended to $71,900 but dropped to test $67,000 again on May 23.
This consolidation implies that Bitcoin’s bullish strength is not as high as investors expected. In fact, a recent report from AMBCrypto explored some relevant Bitcoin metrics, finding that many of them remained low.
Memecoins managed to capture public interest
Source: Information about Santiment
On a post on X (formerly Twitter), Sanction shared some insights into crypto trends on social media. Memecoins have captured more public attention since mid-April due to their superior performance as a sector.
Tokens like dog with hat [WIF], FLOKI [FLOKI]It is Shiba Inu [SHIB] recorded good performances last week. Pepê [PEPE] has also recorded notable gains over the past two weeks, with the altcoin rising 63% since April 20. This occurred at a time when Bitcoin tried to surpass US$67,000, but did not achieve a strongly optimistic result.
The strong involvement with memecoins could be a sign that the market is greedy and speculative and is not in a phase of organic development, where the public pursues tokens with good technology and utility.
Now the Bitcoin ETF Inflows have been positive lately and the month of May also ended well. However, it remains to be seen whether this is enough to start another rally this week.
Source: Information about Santiment
The data also showed that Bitcoin discussions were falling. According to Santiment, this was because traders were increasingly fixated on altcoins for potential gains while Bitcoin teetered below the $70K resistance.
Large-cap momentum was mostly bullish
Source: Information about Santiment
The RSI on the 1-day range revealed that most major tokens were near or above the neutral 50 mark, signaling bullishness. Ethereum [ETH] It is Solana [SOL] were the strongest with readings of 67 and 55, respectively.
About that, Cardano [ADA], XRPIt is Avalanche [AVAX] struggled to gain upward momentum on the charts.
Source: Axel Adler in X
Here, it is also important to note that the trading volume of major altcoins has dropped drastically, when compared to March. Crypto analyst Axel Adler pointed this out in a post on X, claiming that Bitcoin’s lack of momentum has been affecting sentiment across the market.
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The volatility and trading volume behind Bitcoin has declined since March, and the price continues to trade in the $60,000 to $72,000 range. Investors need to be patient, while traders need to watch out for range formations and not get caught out by false breakouts.