Meme Coins Lose $5 Billion in Open Interest Amid Market Sentiment Shift

The meme coin market experienced an $8 billion decline in interest due to investors withdrawing their funds.

Meme cryptocurrencies have experienced a decline recently, with a $500 million decrease in interest since December 9th. Dogecoin (DOGE), PEPE, Shiba Inu (SHIB), FLOKI, BONK, and WIF have all witnessed drops in value, indicating a change in how investors perceive them.

Glassnode data indicates that DOGE experienced a decline in open interest by a staggering 52%, resulting in a loss of $2 billion in value wiped out from the market cap total. DOGE was closely followed by PEPE, SHIB, and BONK, which saw declines exceeding 70% from their peak values in December. The decrease is attributed to worries over the valuation of meme coins and doubts regarding pump-and-dump practices influencing the downturn.

Market volatility has increased stress in the market landscape recently due to a downturn on February 3, impacting meme coins adversely and stirring up controversy around LIBRA—a meme token associated with Argentine President Javier Milei—which further contributed to instability in the market scene as revelations unfolded about a small group of wallets having significant control over its supply, leading to concerns about potential manipulation.

Investor trust is still uncertain as DOGE dropped by 3%, PEPE by 8%, and SHIB by 4% over the week. Analysts are foreseeing a prolonged period of stability if market sentiment doesn’t pick up soon with the waning interest in investments.