Donald Trump and Melania’s Meme Coins: Will They Crash?

The recent surge in celebrity-themed tokens has brought Donald Trump and Melania’s meme coins into the spotlight, with Official Trump and Melania Trump tokens now valued at $9.3 billion and $1.2 billion, respectively. However, despite their initial success, several factors suggest that these tokens may be heading for a crash.

The Celebrity Token Pattern

Historically, most celebrity-themed tokens experience an initial surge, only to retreat once the hype fades. For instance, Rapper Iggy’s MOTHER token jumped over 1,000% in its first few days, hitting a high of $0.2410, but has since dropped by 91%, trading at $0.020 and nearing its all-time low.

Similar patterns have occurred with other popular tokens like Daddy Tate and JASON, highlighting the risks associated with investing in celebrity-themed tokens.

The “Buy the Rumor, Sell the News” Phenomenon

The “buy the rumor, sell the news” phenomenon may also contribute to a potential crash. The TRUMP and MELANIA tokens surged ahead of Donald Trump’s inauguration, but could decline once the hype settles and the market enters a new normal.

As this new phase begins, insiders and large investors (whales) are likely to sell their holdings to take profits, potentially leaving retail traders holding the bag.

History Suggests a Crash

History suggests that many cryptocurrencies surge initially and then retreat after a while. Shiba Inu jumped to $0.000088 in 2021 and is now down by 76% below its all-time high. Similarly, Dogecoin is about 50% below its record high, while Floki is down by 57%.

Regulatory Risks

The Securities and Exchange Commission’s policies may also impact the value of TRUMP and MELANIA tokens. While some crypto investors have cheered the end of Gary Gensler’s era and are looking forward to Paul Atkins, there is a risk that some of his policies as the head of the SEC will not be as friendly as crypto investors expect.

Lack of Catalyst

Furthermore, TRUMP and MELANIA tokens lack any clear catalyst now since the biggest crypto exchanges like Binance and Coinbase have listed them.

Technical Analysis

Technically, the recent surge was part of the Wyckoff’s markup phase, characterized by higher demand. This phase is usually followed by the distribution and the markdown when assets drop.

While it’s impossible to predict the future with certainty, it’s essential for investors to be aware of the potential risks associated with investing in celebrity-themed tokens.

For more news and updates on the world of cryptocurrencies, visit Global Crypto News.

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