财经少华
--
Why Meme Coins Signal the End of the Bull Market Cycle
Meme coins mark the final phase of the crypto bull market, as they reflect a shift from rational investment to frenzy. At this point, any fundamental factors give way to sentiment (mainly greed). Meme tokens, which usually have almost no practical value, begin to dominate trading volume simply because they are popular on social media or supported by the community.
Historically, this pattern has repeated during each major rally. In 2017, it was those low-quality initial coin offerings (ICOs) without products. In the second half of 2021, SHIB soared 1200% during the second wave of crypto price increase and began to decline at the end of October. There was a two-week gap before Bitcoin started to drop in early November, providing a good warning for all investors.
Every time a new crypto craze emerges, it is accompanied by excessive participation from retail investors, a sharp decline in Bitcoin's dominance, and ultimately leads to a crash in market prices. Meme coins from past crypto booms attracted the latest wave of liquidity, often coming from inexperienced investors seeking quick profits, indicating that the market was overheating.
Conclusion
Cryptocurrency trends exhibit cyclical changes, which largely depend on the flow of funds from large-cap projects to small-cap projects. While it is impossible to accurately predict tops and bottoms, understanding the structure of bull market cycles based on human psychology will help you find the best entry and exit points in the crypto market. Pay attention to the flow of funds, identify trends and signs of frenzy, and always have a good profit-taking plan.
Meme coins mark the final phase of the crypto bull market, as they reflect a shift from rational investment to frenzy. At this point, any fundamental factors give way to sentiment (mainly greed). Meme tokens, which usually have almost no practical value, begin to dominate trading volume simply because they are popular on social media or supported by the community.
Historically, this pattern has repeated during each major rally. In 2017, it was those low-quality initial coin offerings (ICOs) without products. In the second half of 2021, SHIB soared 1200% during the second wave of crypto price increase and began to decline at the end of October. There was a two-week gap before Bitcoin started to drop in early November, providing a good warning for all investors.
Every time a new crypto craze emerges, it is accompanied by excessive participation from retail investors, a sharp decline in Bitcoin's dominance, and ultimately leads to a crash in market prices. Meme coins from past crypto booms attracted the latest wave of liquidity, often coming from inexperienced investors seeking quick profits, indicating that the market was overheating.
Conclusion
Cryptocurrency trends exhibit cyclical changes, which largely depend on the flow of funds from large-cap projects to small-cap projects. While it is impossible to accurately predict tops and bottoms, understanding the structure of bull market cycles based on human psychology will help you find the best entry and exit points in the crypto market. Pay attention to the flow of funds, identify trends and signs of frenzy, and always have a good profit-taking plan.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.