Why memecoins are down today? How Trump’s gala dinner played a part

• Memecoins lost 7.5% in market cap as Bitcoin fell 4.5%, dragging sentiment down sharply.
• DOJ probe into Trump’s crypto dinner triggered market-wide panic and $598M in total liquidations.

Bitcoin’s [BTC] 4.5% drop earlier today didn’t just drag the broader market—it wrecked memecoins.

The meme sector’s market cap fell 7.5%, while trading volumes tanked by 10.35%, according to data reviewed by AMBCrypto.

And that wasn’t all.

Massive selloff in memecoins

Amid this, Pepe [PEPE], Official Trump [TRUMP], dogwifhat [WIF], and Floki [FLOKI] were among the hardest hit, recording price declines of 11%, 9%, 12.5%, and 9.5%, respectively, during the same period.

The ongoing dip in the above memecoins does not appear to be just a dip; it seems more like a crash, as the prices continue to decline and have changed the overall price action.

But why did the memecoin floor fall out?

The potential reason behind this brutal dip in crypto memecoins is the recent move by U.S. lawmakers, who urged the Justice Department to investigate President Donald Trump’s crypto dinner.

The announcement of this investigation created panic, leading to a notable decline in major assets such as Bitcoin and Ethereum [ETH], and causing total liquidations to exceed $598 million.

The majority of the liquidations came from long positions, which accounted for $508.66 million, while short positions saw $89.59 million in liquidations. This indicates that the bulls were hit the hardest.

The $600 million in total liquidations not only impacted major assets but also triggered a 7.5% crash in the overall memecoin market cap.

The signal was clear—bulls got caught off guard.

Are whales buying the dip?

While prices dipped, wallets got busy.

According to Spot Inflow/Outflow data by CoinGlass, exchanges across the globe have recorded outflows of $38.79M in PEPE, $33.81M in TRUMP, $17.19M in WIF, and $2.13M in FLOKI. 

This substantial outflow from exchanges in the current market conditions indicates potential accumulation, which could lead to buying pressure and a further upside rally.

What’s next for the memecoins?

Following the notable 11% price decline, PEPE failed to hold its recent breakout above the key resistance level of $0.0000145 and fell below this level.

If market sentiment remains unchanged, the memecoin could see a further price decline of 14%, potentially reaching the $0.000012 level.

The TRUMP memecoin, following its recent dip, has fallen to its key support area of $12.50.

This level has a strong history of price reversals; whenever the price has reached this level, it tends to see an upside rally of 20%, which could be possible for the TRUMP memecoin in the coming days.

With the recent price dip, WIF has formed a bearish pin bar candlestick pattern at the resistance level, which has a history of price reversals.

According to this historical pattern, whenever the memecoin’s price reached this level, it mostly experienced downside momentum.

Given the current market sentiment, it seems likely that history will repeat, and WIF could see a price decline of 15% until it reaches the next support level at $0.93.

Similar to WIF, FLOKI has also formed a bearish engulfing candlestick pattern at the top of the resistance level, indicating a potential price decline.

Historically, this level has acted as an area of selling pressure, and whenever the price reached this level, it recorded downside momentum.

If the current market sentiment remains unchanged, FLOKI could see a price decline of 12% until it reaches the next support.