The world of cryptocurrencies has always been a place of constant change and evolution; however, a few market segments have enjoyed constant levels of attention and excitement. Meme coins, often characterized by their playful and often absurd themes, have captivated the hearts and wallets of investors and enthusiasts alike. From Dogecoin, the meme-inspired cryptocurrency that reached an all-time high of $0.73 in May 2021, to other animal-inspired coins that have no intrinsic value but can be pushed hard by dedicated communities, creating unbeatable hypes and becoming a force to be reckoned with in the crypto market.
Meme coin pumps are synonymous with bullish runs as they ride on the positive market sentiments; hence, as we started the year with a slightly bullish sentiment, the question on the minds of many is whether or not we are about to see a resurgence in the meme coin craze.
With the crypto market as a whole on the rise, it is certainly possible. But it's also important to consider their strengths, weaknesses, and other key factors that could influence their success this year. Whether you are bullish or bearish, one thing that everyone can agree to is that the meme coins of the past have shown that they can make a big impact in the crypto market; hence, whether you're a seasoned investor or a curious observer, the world of meme coins is definitely worth keeping an eye on in the coming year. As the market may be in a bullish trend and more people are getting interested in crypto, this might be the perfect time to jump in and catch the next big wave.
With a few key points, we will explore the world of Woof! Purr! and see if the meme coin craze is truly about to make a comeback in 2023.
Have We Really Exited The Bear Market?
One of the biggest factors that will influence the success of meme coins in 2023 is whether or not we have truly exited the bear market that lasted for about 13 months (as of December 2022). While the crypto market as a whole has seen a rebound in recent weeks, many investors are still cautious about jumping in, as they are not completely sure that the bear market is truly over.
One key indicator that could tip the scales towards a highly bullish sentiment is if Bitcoin, the largest and most well-known cryptocurrency, were to cross the $30,000 mark again. Bitcoin's price strongly correlates with the rest of the crypto market, and many investors consider it to be a bellwether for the market's overall health. If Bitcoin can regain its all-time high and hold steady above $30,000, it could signal that the bear market is truly over and that the crypto market is ready for a new period of growth.
Fear and Greed Index
Another important factor to consider when assessing the potential for meme coins in 2023 is the Fear and Greed Index. This index, based on investors' emotions, can provide valuable insight into the current state of the crypto market. When there is extreme greed in the market, many investors will pump money into tokens where they can see quick gains, of which meme coins are a big part. This can drive up the prices of these assets, and the earlier investors will get maximum returns as more and more investors rush to get in on the action.
On the other hand, when there is a high level of fear in the market, investors will be more cautious and will be less likely to invest in high-risk assets like meme coins - as such, keeping an eye on the Greed and Fear Index is important, as it can provide valuable insight into investors' emotions and the potential for meme coins to perform well in the coming year.
Bitcoin Dominance Matters
A final key point to consider when assessing the potential for meme coins in 2023 is the importance of Bitcoin dominance. Bitcoin Dominance is the ratio of Bitcoin's market capitalization to other altcoins in the entire crypto market. Consequently, the Bitcoin Dominance Index (BDI) helps investors to know whether bitcoin has a stronger hold over the market or the altcoins are ruling.
When Bitcoin's market share is high, it is generally considered to be a sign of a strong and healthy market. Conversely, when the market share of altcoins (of which meme coins are a huge part) is high, it can indicate that the market is becoming more decentralized and that investors are becoming more interested in alternative assets.
Typically, a good time to invest in altcoins (meme coins inclusive) is when Bitcoin is in an uptrend, but Bitcoin dominance is in a downtrend; this signifies a strong market where investors are considering alternative tokens. Currently, BTC dominance stands at 41%, so you should be on the lookout to see the market movements in the coming weeks and months.
The potential for meme coins in 2023 will be influenced by various factors, including the overall state of the crypto market, the emotions of investors, and the relative dominance of Bitcoin. While there is certainly a lot of uncertainty and volatility in the crypto market, the meme coins of the past have proven to be a force to be reckoned with, and any new players in the game will have some big paws to fill.