Meme coins show signs of recovery following GameStop's bullish reversal

Several meme coins are showing signs of recovery from the market dump experienced earlier on Tuesday after GameStop stock posted more than a 25% gain in the past 24 hours.

GameStop rally could save meme coins from heavy dump

GameStop stock has seen over a 25% rally in the past 24 hours after the company's Chairman and CEO Ryan Cohen won a court case 16b lawsuit concerning his investment in companies Bed Bath and Beyond Inc. The move has seen several meme coins show recovery signs after suffering from heavy losses earlier in the day.

Dogwifhat (WIF) has steadily declined since May 29, recording over a 38% loss in nearly two weeks. The Solana meme coin reached a monthly low of $2.44 today before showing signs of recovery in the past few hours. This shows reduced interest in WIF, which was at the forefront of the meme coin mania in March.

Read more: Dogecoin, Shiba Inu on-chain metrics support price decline as meme tokens bleed

According to Coinglass data, the decline is accompanied by a 71% surge in WIF's trading volume, reaching $1.23 billion across Binance, Bybit, and OKX. A 2.5% gain in the past few hours shows that bulls must have been accumulating the meme coin at low prices following the GameStop gain.

FLOKI also saw heavy sell-offs, shedding more than 7% of its value in the past 24 hours. It has been on a downward trajectory since reaching an all-time high of $0.0003449 on June 5, possibly caused by profit-taking. It's currently 30% down from its all-time high.

FLOKI may experience more sell-offs if the crypto market experiences a further decline, as about 97% of the coin is in the money, according to data from IntoTheBlock.

In/Out of the Money reveals the total number of addresses/coins in profit or loss based on their average cost of purchase. An address/coin is in the money if its current price is higher than its average cost and vice versa if it is lower.

Also read: Dogwifhat meme coin likely to provide another buying opportunity

FLOKI Global In/Out of the Money

The volume of large FLOKI transactions also doubled within the past three days as its price declined, confirming the increased sell-offs earlier in the day.

FLOKI's 30-day MVRV ratio is at -8%, meaning addresses that purchased the meme coin within the last 30 days are at an average loss of 8%. This indicates a potential bullish reversal is on the horizon. In the past few hours, FLOKI has gained nearly 2%, showing that buyers may be coming back into the market.

Base meme coin BRETT declined by 6% in the past 24 hours. Despite reaching a new all-time high on Sunday, BRETT's selling pressure is lower compared to other meme coins. This shows holders may still be holding onto their tokens in hopes of higher prices. BRETT has seen over a 2% gain in the past few hours.

Read more: Solana meme coins GME, AMC suffer brief decline after GameStop releases earnings ahead of schedule

Data from Coinglass also shows that liquidations across several meme coins increased significantly in the past 24 hours following the decline. However, the one-hour liquidations show shorts are being heavily liquidated.

Meanwhile, the GME meme coin, which is not affiliated with GameStop, has seen nearly a 10% gain in the past 24 hours, mimicking the bullish reversal in the company's stock.