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GameStop (GME) Frenzy Spreads Into Crypto Meme Coins, Caution Ahead?

FOMO buying into the GameStop ($GME) meme coin costed three investors thousands of dollars. Analysts advise caution from falling into meme coin trends.
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GameStop (GME) Frenzy Spreads Into Crypto Meme Coins, Caution Ahead?

Highlights

  • GameStop meme coin rallied 4000% in three days against the 200% surge in GameStop stock.
  • Three investors lose thousands of dollars in $GME after falling to FOMO buying.
  • Analysts advise caution to investors for investing into meme coins at this stage.

The recent frenzy in GameStop (GME) has spread across the cryptocurrency market, especially in the meme coin sector. As the US CPI numbers came in line with the market expectations, a strong rally ensured across all meme coins, especially the top players such as PEPE.

Strong Meme Coin Party Amid GameStop Frenzy

In Q2, the memecoin sector has outpaced all others in the crypto market, reported on-chain data provider Santiment. Assets such as $PEPE (+100%), $PONKE (+96%), $MAGA (+80%), $TURBO (+78%), etc. have experienced significant surges. Over the past week alone, meme coins have seen a staggering 136% increase in trading volume.

Within the meme coin sector, the PEPE Coin has been one of the most outperforming altcoins while hitting a new all-time high earlier this week.

What’s more interesting is that the GameStop (GME) meme coin, based on the Solana blockchain, witnessed a 4,000% rally in the last two days. Note that this meme coin has nothing to do with the GameStop company whose stock has registered a 200% gain in the last three trading sessions. Thus, investors need to be more careful while trading the $GME meme coin. In the last 24 hours, the $GME meme coin price has dropped by nearly 50%.

Red Flags for Investors

On-chain data provider Santiment reported that the frenzy surrounding Gamestop and AMC has significantly influenced the crypto sphere, largely due to shared speculative tendencies. These two companies are currently dominating discussions across cryptocurrency platforms. These spikes often precede shifts in market direction, offering opportunities for astute traders to capitalize on.

However, bets made on FOMO could cost dearly to investors. On-chain data provider Lookonchain cited three such traders who lost thousands of dollars by trading in FOMO.

Other market analysts are not not quite positive on meme coins, after a strong rally already this year. Popular crypto analyst CrediBULL Crypto writes: “Let me be 100% clear where I stand here- major memes like $DOGE, $PEPE, $WIF and others are either forming or have already formed multi-month distribution tops and will see significant drawdown before their next major legs to the upside”.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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