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Meme-Coin, AI Tokens Lead Gains After Bitcoin Drop Causes $2B in Weekend Liquidations

Apr 14, 2024
    Meme coins and AI-linked tokens experienced significant sectoral gains in the past 24 hours, outperforming major tokens including bitcoin.Bitcoin and other major tokens began to recover from weekend losses, with BTC trading around $66,600 in European morning hours, buoyed by claims of approval of spot bitcoin and ether ETFs in Hong Kong.The market-wide decline had been caused by profit-taking ahead of the bitcoin halving and macroeconomic tremors, leading to the liquidation of over $2 billion in futures positions and a drop in open interest as bets were closed.

In the last 24 hours, meme coins and artificial intelligence tokens experienced growth, while Bitcoin and other significant cryptocurrencies began to recover from their weekend declines.

In the European morning market, Bitcoin (BTC) gained approximately 3.3%, reaching around $66,600. This surge was fueled by optimistic news that potential ETF providers had reportedly received approval to list bitcoin and ether Exchange-Traded Funds (ETFs) in Hong Kong.
The average growth rate for meme coins on the Solana, Dog-themed, and Base networks surpassed 15%, according to CoinGecko’s category data, while AI tokens experienced a rise of over 17%. No clear reason triggered these increases.
The cryptocurrencies of the first layer blockchains, including ether (ETH), Solana’s SOL, and Avalanche’s AVAX, experienced some of the poorest growth, with an average increase of 5.5%. In contrast, the diversified CoinDesk 20 index, which excludes stablecoins, witnessed a nearly 6% rise.
According to a post on the platform Lookonchain, which specializes in on-chain analysis, wealthy traders, commonly referred to as “whales,” purchased approximately millions of dollars’ worth of the meme tokens MEW (Cats in a Dogs World) and SLERF (Slerp) within the last day. Consequently, the prices for these tokens surged by nearly 80% over the past 24 hours.

Bitcoin and other cryptocurrencies experienced a significant drop in value leading up to this week’s anticipated halving event. Fear of profits being taken and economic instability weighed heavily on the market starting from late last week. Consequently, the price of bitcoin plummeted from its peak of $70,500 to a low of $62,800, causing major cryptocurrencies to decline by as much as 18%.

Approximately $2 billion worth of futures contracts were terminated during the weekend, marking the largest amount since March, according to data from the analysis tool Coinalyze. Out of this total, over $1.5 billion were wagers placed on price increases.

A representative from Coinalyze communicated to CoinDesk via text message that the recent flush of leverage in cryptocurrency futures markets led to a decrease of approximately $13 billion in open interest since last Friday. This decline suggests that investors have closed their bets.

Traders had predicted a drop in price prior to the scheduled halving on April 20th, an highly anticipated occasion where the incentives given to miners for their network contributions would be reduced by half.

“According to Matteo Greco, a research analyst at Fineqia International, past bitcoin halving occurrences have generally led to uptrends lasting 9-12 months. However, these events have also caused temporary drops in price before and after the halving due to market reactions to the news.”

“During the past week, Bitcoin Spot ETFs experienced a net withdrawal of $85 million, indicating that investors are taking profits and exercising caution due to bearish sentiments towards Bitcoin’s short-term price trend. This observation is consistent with the significant gains seen in Q4 2023 and Q1 2024.” (Greco commented, referring to US-based Bitcoin ETFs)

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2024-04-15 15:16