Crypto Week: Meme Coins Are Flagging a Bearish Market

Bitcoin prices bounced off the level of $30,000 per coin to drop to $22,000. A recent breakthrough of the $30,000 level could be considered false if prices dive below $27,000. These fluctuations are happening without any major upside reasons for the market, meaning that cryptocurrencies are likely to return into correction mode to test new lows.

Meme coins, that are usually depicted from comical or animated memes and have little or no intrinsic value, are rallying to two-year highs. Coins like Pepe coin have easily crossed the $1 billion market cap threshold terrifying investors. Such speculative activity is regularly associated with bearish reversals in Bitcoin and manifests the end of the rally.

Investors have finally recognised that the recession for the U.S. economy is not as close as many have anticipated. So, a mindset of swift interest rates decline by the Federal Reserve (Fed) prompted by a nearing recession could be wrong at the moment. Recent strong labour market data in the United States signaled a longer perspective for high interest rates, or even another hike for the Fed. That resulted in rising yields for 10-year U.S. Treasuries, while large banks like Goldman Sachs and Barclays reconsidered interest rates to remain at high altitudes by the end of 2023. The banking sector is seen to be much stronger and resilient to external shocks. Debt ceiling issues in the United States are being largely exaggerated. Thus, the Dollar is seen to be on the recovery path overshadowing any perspectives for a risky assets rally, including cryptos.