Crypto Market Review, Aug 16

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Arman Shirinian

Memecurrencies are still on the rise, while the cryptocurrency market points to a possible reversal

The meme coin rally in the market continues as Dogecoin became the most profitable asset in the market in the last 24 hours, gaining more than 15%. The rally in memecurrencies has continued over the past three days as SHIB also managed to restore some of its previously lost value.

Dogecoin’s battle with Shiba Inu

Over the past few days, the market has seen a battle between the two largest meme coins on the market for 10th place in the list of assets ordered by market capitalization. Shiba Inu, with his $8.7 billion mcap, is actively boosting Polkadot, which is worth $9.8 billion at press time.

Unfortunately for SHIB holders, the meme token is not likely to suddenly take the place of the old classic Dogecoin which currently has a market cap of almost $12 billion.

DOGE chart
Source: TradingView

To reach the level of Dogecoin, Shiba Inu would need a price increase of more than 40%, which would bring it closer to the $12 billion DOGE. This scenario is unlikely to come true, considering the correlation between the two meme coins that usually go head-to-head in the market.

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One of the main drivers for both assets today is the high demand for risk exposure, which was present in the market last week. Even though the market was risk hungry, this whole trend will most likely fade considering the lack of inflows to the market.

New wave of investors leaving the market

Following our news about Michael Burry deciding to leave the financial market and ditch all his stock holdings, we are seeing an outflow of funds from the cryptocurrency market by institutional investors withdrawing over $17 million in assets from the industry.

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While the number doesn’t seem significant, the lack of entries and the appearance of exits could be the start of a trend for the coming weeks or even months. With Bitcoin starting to lose its value rapidly, we will see the acceleration of the outflow of funds.

What fuels the reversal

As we mentioned before, the US dollar rally could be the next fuel for a cryptocurrency market reversal. The DXY index successfully bounced off the local support level and started to move higher, gaining over 1.6% of its value.

The growth of the index is a bearish signal for the digital assets market, since it usually causes the devaluation of all assets against the currency. Additionally, investors are shifting their funds toward more conservative investment options like bonds.

At press time, Bitcoin is changing hands at $23,928 and is still moving in an ascending consolidation channel for the past few weeks. Fortunately, the first cryptocurrency is able to stay in the range and loses about 1% of its value in the last 24 hours.

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