Meme coins have taken over the liquidity of Bitcoins, Ethereum and other cryptocurrencies.
Meme coins are basically the crypto assets that gain popularity through social media trends, influencers and the community of the blockchain they are operating on. Some famous meme coins are Dogecoin and Shiba Inu.
These coins gain popularity overnight and also lose popularity overnight. Most meme coins become shit coins, that is useless coins. But the ones that are very trending nowadays and are doing incredibly in the last couple of years are Dogecoin and Shiba Inu.
Recently, an anonymous crypto trader, named Crypto Tony alleged that the meme coins are taking away the liquidity of cryptocurrencies like Bitcoin and Ethereum.
He made this statement via Twitter through a tweet to his 289000 followers saying liquidity is flowing to meme coins from $BTC / $ETH. He also stated that this is the reason for the “ Sell in May” phenomenon.
“Sell in May and Go away” is a phenomenon where it is believed from the historical performance of stocks, that due to the Halloween craze, the average growth of stocks in the months of November to April is much higher and stocks perform poorly during May to October. It’s a theory put forward by stock trader Almanac.
The anonymous trader
The tweet of this trader came during the time when Pepe coin, a famous meme coin is getting a 2300% rally every day. In the last 24 hours, it has surpassed Dogecoin also.
According to the Ethereum Blockchain explorer, Pepe coin has about 75000 holders holding a total of $5 million worth of tokens.
Even though the hype for this meme coin is quite high, some traders are backing off. A trader sold out coins worth $2 million bearing up a loss of $350000 because of less liquidity.
He then revealed in a tweet that he is still waiting for a position entry on Bitcoin, and his best option would be to wait for a long position upon a test of the range low at $26,600. He also suggested that he may even go for a short if they fail to hold this position.
According to him, Dogecoin will increase its value soon after the new laws. And Bitcoin will go down to rise up the other Altcoins.
He is keeping a close eye on Altcoins for the third and fourth quarters in 2023.