- Top 10 losers in the market include memecoins like BONK, FARTCOIN, PENGU, and WIF
- Analysis revealed that weak sector performance and the Altcoin Index have significantly influenced this decline
A review of the memecoin market sector highlighted a 5.59% drop across the board, at the time of writing. In fact, as the memecoin market fell, four leading tokens – BONK, FARTCOIN, PENGU, and WIF – emerged as the top losers.
AMBCrypto has since analyzed the reason behind the fall in the memecoin market and where these assets could be heading next.
Low sector and altcoin performance affects memecoins
Interest in memecoins has dropped significantly, when compared to the previous month.
According to Artemis’s sector performance data, which tracks how each market segment performs through a weighted average, memecoins have seen a sharp decline lately.
Memecoins, which rallied by 17.6% last month and ranked as the sixth-best performing segment, have now fallen behind.
Source: Artemis
Over the past 7 days, the sector has appreciated by just under 2%, with most of these gains seen over the last 24 hours.
This hinted at a lower liquidity allocation into the memecoin sector, contributing to the crypto’s weak performance.
In fact, analysis indicated that this drop stemmed from liquidity flowing into the Bitcoin ecosystem, while the Altcoin Index fell on the charts.
Source: CoinMarketCap
Here, altcoins refer to all tokens other than Bitcoin. The Altcoin Index tracks how this segment performs based on liquidity inflows.
When the index is low (As it is now, with a reading of 26), it implies less liquidity is entering the altcoin market and more is going into Bitcoin. Such a shift explains why Bitcoin continues to hold above $100,000 on the price charts.
How will these memecoins perform?
AMBCrypto analyzed each of these top-losing tokens to assess whether these assets will continue to fall or whether they will rebound.
BONK — A two-way path
At the time of writing, BONK memecoin was trading on an ascending support line – A pattern that influences price in two possible directions.
Such a bullish scenario, as seen in previous instances, hinted at a rally each time BONK hits this support level.
Source: TradingView
This has happened three times so far, and BONK could repeat the pattern soon.
However, in the bearish scenario, BONK could break south, reversing gains made since trading along the ascending line. In this case, BONK could fall to $0.00001405.
Fartcoin – Follows a bullish fractal pattern
FARTCOIN has followed a fractal path since its April rally, forming higher highs (HH) and higher lows (HL).
These higher lows have aligned with key support levels, with the same acting as catalysts for past rallies.
Source: TradingView
If the press time candlestick closes above the support line, a new higher high may be on the horizon for the memecoin.
PENGU —Weak trading activity
Finally, PENGU’s performance was weak at press time. It seemed to be consolidating at the lower support level of a symmetrical triangle.
Although it entered the support zone of this channel, the price reacted slowly and failed to make a notable move north on the charts.
Source: TradingView
Typically, this pattern should trigger a quick rally to $0.015 and then, $0.017.
However, given the prevailing price action, the memecoin may continue consolidating without significant gains.
WIF — Slight rally, major drop
Bollinger Band analysis suggested WIF could see a brief rally before a major decline.
At the time of writing, WIF had entered the middle band and moved north towards the upper band (marked in red).
Source: TradingView
If the upper band acts as resistance, as it often does, the memecoin could trend lower – Potentially falling to $0.764 and marking a 41% decline.
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