The meme coin market has seen a noticeable slowdown this week, with the sector’s market cap down 5% over the past five days.
During this time, the value of many meme assets has fallen, and several well-known tokens have suffered double-digit losses.
Dogwifhat (WIF) Takes Losses As Short Traders Take Over
WIF suffered the steepest decline of the top five meme assets by market cap last week. Trading at $1.48 at press time, the altcoin has fallen 20% in value over the period. The meme coin hit a weekly low of $1.45 on Thursday before bouncing back slightly.
The downward trend in WIF has fueled a surge in short demand in the derivatives market. Data from Coinglass shows that WIF funding rates have remained mostly negative throughout the week, currently at -0.0098%.
Funding rates are a mechanism used in perpetual futures contracts to ensure that the contract price of an asset stays close to its spot price. When they are negative, more traders are betting on a price decline than those buying and hoping for a rally.
In the spot market, demand for WIF has also dropped significantly. Its relative strength index (RSI) is trending downward at 38.22, indicating that selling pressure is currently stronger than token accumulation.
Read more: How to buy Dogwifhat (WIF) and everything else you need to know
If this downward trend continues, WIF could fall further to $1.07. However, a change in market sentiment and a surge in demand could push its price to $1.96.
Pepe (PEPE) at risk of falling 23% on growing selling pressure
The frog-themed Pepe coin is currently trading at $0.0000075, down 14%. PEPE’s Accumulation/Distribution (A/D) line has been in a steady downtrend this week. At press time, it was at 780.42 trillion, down 5% over the past seven days.
The A/D line tracks the flow of money into or out of an asset, indicating whether it is accumulating or distributing. A falling A/D line signals that selling pressure is outweighing buying activity, a bearish indicator that suggests further price declines.
Adding to this outlook is the declining Chaikin Money Flow (CMF) of PEPE. Currently at -0.18 and below zero, the CMF is also trending lower. The falling price paired with a declining CMF confirms the growing selling pressure, indicating that more traders are selling PEPE than accumulating it.
Read more: Pepe (PEPE) Price Forecast 2024/2025/2030
If PEPE buying pressure remains low, its price could fall 23% to $0.0000058. This bearish forecast will be invalidated if the meme coin sees a surge in demand, pushing its price to $0.0000085.
Bonk (BONK) prepares for the “Death Cross”
An analysis of the BONK daily chart reveals a potential death cross formation, where the 50-day simple moving average (SMA) (blue line) is approaching a cross below the 200-day SMA (yellow line).
The Death Cross occurs when the 50-day SMA falls below the 200-day SMA, signaling a bearish trend. This suggests that the short-term gains in BONK are waning and may be shifting to a downtrend. Traders often view this pattern as a sell signal, prompting them to exit long positions and consider shorting.
Read more: How to Buy Solana Meme Coins: Step-by-Step Guide
At press time, BONK is trading at $0.000018, down 11% this week. If selling pressure intensifies as the death cross forms, its price could fall to $0.0000015. However, if the moving averages reverse due to any increase in demand, it could push BONK’s price to $0.000022.
