Reduced Leverage Drags Altcoin Trading: Meme Tokens Bear the Brunt

The crypto market experienced a notable shift this week, with a selloff that triggered a decline in the open interest-to-market cap ratio for many altcoins, according to Kaiko data. This indicates reduced leverage and trading activity in the altcoin market, highlighting a growing sense of caution among investors. Meme tokens, including Bonk (BONK), Dogwifhat (WIF), PEPE, and Dogecoin (DOGE), felt the brunt of the downturn, with substantial declines in their market metrics.

?Following this week’s selloff, the open interest to market cap ratio dropped for most altcoins, indicating lower leverage.

?Meme tokens like BONK, WIF, PEPE, and DOGE saw the biggest declines. pic.twitter.com/2xJMEpFjGI

— Kaiko (@KaikoData) December 13, 2024

BONK Faces Bearish Momentum

Bonk (BONK) witnessed a 2.81% price drop in the last 24 hours, trading at $0.00003862. The token’s market cap fell by 2.77%, now standing at $2.92 billion, while its 24-hour trading volume decreased by 10.28% to $386.52 million.

Despite occasional recoveries, BONK’s overall price trend is bearish, down from its recent peak of $0.0000397.

Source: Coinmarketcap

Key resistance levels for BONK lie at $0.00004000 and $0.0000397, critical for initiating bullish momentum. Meanwhile, support at $0.00003800 and $0.00003770 could prevent further losses. A break above $0.00004000 may signal a reversal, while a failure to hold $0.00003800 could deepen the downtrend.

Reduced Leverage and Trading Activity Impact WIF

Dogwifhat (WIF) experienced a sharper decline, with its price dropping by 5.83% to $2.91. The token’s market cap mirrored this decrease, while trading volume fell by 6.26% to $498.96 million, pointing to reduced participation. After peaking at $3.08, WIF followed a steady downtrend. This decline in WIF aligns with the broader reduction in leverage and trading activity seen across the altcoin market.

Source: Coinmarketcap

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Resistance levels at $3.08 and $3.00 remain critical for any recovery, while support zones at $2.90 and $2.85 offer potential stability. However, breaking below $2.85 could signal a more significant sell-off.

PEPE Shows Resilience Despite Altcoin Market Downturn

PEPE token displayed a milder 1.02% decline, trading around $0.0000233. Despite the volatility, the price has made gradual upward attempts after hitting lower lows. This relative strength may indicate that PEPE is less affected by the reduction in leverage and trading activity impacting the broader altcoin market.

Source: Coinmarketcap

Support at $0.0000230 and $0.0000233 is crucial for maintaining recovery efforts. Resistance at $0.0000245 and $0.0000248 presents hurdles for further upward movement. Sustaining above $0.0000230 could signal bullish consolidation.

DOGE Consolidates as Leverage and Trading Activity Decline

Dogecoin (DOGE) traded at $0.4065, marking a 1.90% decline over the past day. Despite a sharp spike to $0.4137, the token faced resistance, leading to sideways trading. This consolidation in DOGE likely reflects the overall decrease in leverage and trading activity across the altcoin market.

Source: Coinmarketcap

Key support levels are observed at $0.3980–$0.4000 and $0.4050, while resistance at $0.4137 and $0.4100 limits upward movement. Consolidation appears likely unless trading volume increases to break the current range.

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