FOMO Towards PEPE and These Meme Coins Raises Caution Flag for Crypto Markets, Warns Analyst
Leading on-chain analytics provider Santiment cautions that the abrupt rebound across speculative meme coins like PEPE, Floki, and WIF warrants caution signs for the broader cryptocurrency market outlook.
Alongside the explosive rally by non-fundamental dog coins, record Bitcoin ETF volume hint overeager bulls could face harsh pullbacks if momentum stalls.
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Meme Coin Fever Returns Alongside Bitcoin’s $59k Push
Santiment flags concerning parallels emerging as Bitcoin powered to its highest levels in over 15 months this week, approaching the psychologically notable $60,000 threshold – only for meme tokens like PEPE and Wifedoge to concurrently gain significant traction.
“Meme coins are gaining significant increased traction and market cap growth on an otherwise flat Tuesday,” the researchers noted Tuesday, listing PEPE up 63%, Floki climbing 44%, and WIF surging 43% on the day against modest moves elsewhere.
According to Santiment’s findings during past market cycles, sharp diversion of capital from Bitcoin into extremely speculative derivative assets often marked exhaustion turning points – making the developments this week a ‘caution flag’ worth monitoring closely.
Record Outflows from Bitcoin Investment Trusts
Santiment also highlights the Grayscale Bitcoin Trust (GBTC) posting consecutive all-time high daily outflows this week above $7.64 billion, indicating holders are urgently redeploying exposure elsewhere. Similar dynamics plagued GBTC, leading to previous bear trends.
“Speculated to largely be contributed to investors’ combined FOMO and profit taking surrounding Bitcoin breaking new 2-year high market values this week…”
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Show more +If the goal proves rotating short-term gains into lagging small caps like meme tokens in hopes of igniting a bull run, history shows retail’s actions could badly backfire if Bitcoin sentiment flips bearish.
Thus, Santiment cautions on the troubling signs of overextension and greed across areas like meme tokens, just as layers of resistance overhead look to challenge Bitcoin’s ascent, threatening a swift mood change if unsupported buying dries up.
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