Memecoins bear brunt of crypto market selloff
Dogecoin and Shiba Inu each fell approximately 9% on June 5 as Bitcoin slipped toward the psychologically important $60,000 level, triggering liquidations across altcoins and memecoins.
Dogecoin dropped from $0.0891 to $0.0830, breaking the ascending channel that had guided price action since February. Shiba Inu fell from $0.000004997 to $0.000004630, dropping below every major moving average while continuing to print lower highs and lower lows despite aggressive token burns and ecosystem growth.
Bitcoin fell below $60,000 for the first time since October 2024, down nearly 20% this week following news that crypto’s largest buyer, Strategy, turned seller. The decline triggered heavy selling volume and liquidations across the altcoin complex, with derivatives traders moving into defensive positioning.
“Memecoins are usually where traders go looking for risk. This week they’re where risk is getting cut first,” said Shaurya Malwa, author of the analysis.
Both tokens saw their biggest volume spikes during breakdowns rather than recoveries, indicating sellers remained in control. Dogecoin open interest in futures fell, while Shiba Inu open interest hovered near cycle lows, reflecting reduced leverage positioning among traders.
Technical support levels gave way under sustained selling pressure. Dogecoin broke below its $0.0819 key level and approached the $0.067 lower support zone. Shiba Inu fell below its $0.000004780 support level and moved toward the $0.000004575 support zone, with the next downside target at $0.000004500.
A notable conflict emerged in the data: both tokens saw sizeable exchange outflows that would normally signal accumulation, yet prices continued declining. This divergence suggests traders focused on macro conditions and momentum rather than longer-term accumulation signals.
Dogecoin faces resistance at $0.0883 on any recovery attempt. Shiba Inu’s technical picture remains weak across multiple timeframes, with the token unable to stabilize despite the exchange outflows that typically precede price rallies.
The selloff reflects broader market dynamics beyond memecoin-specific factors. Bitcoin’s approach to $60,000 triggered cascading liquidations, with the most speculative corners of the crypto market bearing the heaviest losses as risk appetite evaporated.
