The effervescent Solana-based meme coin, Beercoin, which promised a taste of financial independence, is suffering a massive hangover. Beercoin fell around 70% in a few days following a stratospheric increase in price earlier this month. This sharp drop results from a convergence of elements including a hawkish Federal Reserve posture, a larger crypto market correction, and an alarming trend of insider sales.
Fed Tightens The Taps
The whole bitcoin market is under gloom since the Federal Reserve decided to implement a more hawkish monetary policy, giving inflation control top priority over economic growth. The industry’s benchmark, Bitcoin sank below $66,000 this week, pushing most altcoins down with value.
Highly speculative assets like meme coins, which depend on easy money and investor excitement, suffer especially from this change in central bank policy. Often lacking real-world value or accepted principles, meme coins are thought to be dumped first when risk aversion enters the market.
Whales Jump Ship
Insider selling in Beercoin is a concerning pattern that fuels its slide. LookOnChain’s onchain study showed that multiple people with huge holdings, most likely early investors who bought Beercoin at a discount during pre-sales, have lately cashed out in great numbers.
Another wallet related to the #beercoin team sold 5.43B $BEER for $1.13M!
Although it has been transferred many times, we traced that the wallet received $BEER directly from the #beercoin team wallet “7yfvQX…o9v394” and “8VY4LF…fDd5G2”.https://t.co/vElDToYi5C pic.twitter.com/oYp41d3Naz
— Lookonchain (@lookonchain) June 16, 2024
For retail investors, this huge evacuation by insiders—who presumably have a better knowledge of Beercoin’s potential or constraints—raises major concerns. Their behaviour can be seen as a loss of faith in the project, maybe indicating that Beercoin might not be the golden ticket to riches it was first promised to be.
Technical Indicators: Frothy Future
For Beercoin, technical analysis—the study of price charts and past data to forecast future market movements—painted a similarly negative picture. Not only has the token dropped below a key support level, but it also keeps trading below important moving averages, technical indicators used to measure momentum and point up possible trend reversals.
BEER Price Prediction
The present BEER price estimate, meantime, points to a notable increasing trend, projecting a 220% rise to $0.0₁₀5119 by July 18, 2024. Technical indicators reveal a bearish attitude, suggesting possible caution among investors even with this positive prediction.
At 74, the Fear & Greed Index indicates high market levels of greed and suggests that overactive mood rather than strong fundamentals may be driving the present optimistic view.
BEER has seen an odd trend over the previous thirty days: 100% green days with zero price volatility—an outlier in ordinary market behaviour. This constant upward movement free from volatility could point to a very manipulative or illiquid market.
Featured image from Health | HowStuffWorks, chart from TradingView