Bonk, Pepe, and Floki prices have suffered a harsh reversal in the past few weeks. Floki crashed to a low of $0.00025 on Tuesday, down by over 27% from its highest level this year. Similarly, Bonk, the popular Solana meme coin, has tumbled by more than 40% from last month’s high.
Why meme coins have crashed
There are three main reasons why meme coins like Floki, Bonk, Super Trump, and Ben the Dog have plunged hard in the past few days.
First, this plunge is part of the ongoing profit-taking since these tokens were among the best performers this year. At its peak last month, Floki was up by more than 359% from its lowest level this year.
Similarly, Floki’s price soared to a record high recently, giving it a market cap of over $3 billion. This rally happened because of the meme coin hype and the growth of its ecosystem, including TokenFi, and its tokenization network.
Floki, Bonk, and Pepe prices have also dived because of the happenings in the meme stock industry. After soaring hard earlier this month, GameStop stock has nosedived, erasing billions of dollars of value. It crashed by over 12% on Monday after falling by more than 30% on Friday after releasing weak financial results.
Third, the tokens have dived because of Bitcoin’s performance. Bitcoin recently jumped to $72,000 amid substantial ETF inflows. Recently, however, it has dropped below the key support at $68,000. This is a sign that bulls are a bit afraid of placing bids above the resistance at $70,000.
Further, these meme coins have crashed because of the strong US jobs numbers that have raised the possibility of a higher-for-longer stance by the Federal Reserve. The US created over 272k jobs last month while wage growth accelerated.
These numbers could give the Fed more room to leave rates higher for longer or even hike later this year. Cryptocurrencies and other risk assets like stocks tend to underperform when the Fed is hawkish.
Is it safe to buy the Floki, Bonk, and Pepe dip?
History suggests that these meme coins have room to rebound as this shakeout continues. First, as BanklessTimes has written before, analysts are positive that Bitcoin will jump later this year as ETF inflows continue and supply fades. Michael Novogratz believes that the coin will surge to $100k later this year.
If these predictions are correct, it means that these tokens will bounce back as well. Remember that these tokens do better than Bitcoin when it is in a strong rally.
Second, these meme coins have historically bounced back after a deep sell-off. For example, Bonk crashed to an all-time low of $0.0000092 in December last year and then bounced back by 413% in 2024.
Similarly, the price of Pepe recently dropped from $0.000010 in March to $0.0000039 in April and then rebounded to a record high. Floki has done the same over the years. Therefore, these tokens will likely rebound in the next few weeks.
