TRUMP is Down 7% as Meme Coins Take a Hit Amid LIBRA’s Controversy

TRUMP is the only token among the top five assets in this category whose 7-day performance is still in positive territory with a 2.6% gain. The same goes for its yearly gains, as it still exhibits a 148.3% jump during this period.

Meanwhile, Dogecoin (DOGE), Pepe (PEPE), and Shiba Inu (SHIB) have dropped by 20.7%, 50.8%, and 27.9% since the year started, respectively.

Earlier today, reports started to circulate that people who have bought merchandise through Donald Trump’s official website will be eligible to receive three TRUMP tokens per e-mail address. This results in a $48 giveaway based on today’s prices.

Eligible addresses must claim their reward before March 1.

LIBRA Scandal Affects Meme Coin’s Reputation

The value of meme coins has dropped by 5.7% in the past 24 hours, and its total market cap currently stands at $67.3 billion, as per data from CoinMarketCap.

The controversy surrounding the LIBRA offering and its similarity with the sale of TRUMP and MELANIA have apparently dealt a blow to the sector’s credibility.

On Friday, the President of Argentina, Javier Milei, posted a tweet where he endorsed and promoted the LIBRA token as a core element of an initiative called “Viva La Libertad Project”.

The project’s alleged mission involved supporting Argentinian small businesses and entrepreneurs through grants and loans. However, shortly after Milei shared his post, the value of LIBRA collapsed and over $4.3 billion worth of market value evaporated quickly.

Milei’s X post was deleted shortly after the token collapsed as he realized that promoting the asset was a mistake.

Even though Milei apologized later on and claimed that he was unaware of the project’s details, his detractors are doubtful of his true motives and claim that he should have known better.

Argentinian regulators and lawmakers are now taking a closer look at the incident and they have already threatened to impeach and sue Milei for defrauding thousands of investors.

Donald Trump’s actions involving the sale of TRUMP and MELANIA and the significant concentration of tokens that will be in the hands of insiders have prompted backlash from Democratic lawmakers.

This “insider pool” will be progressively released to the market within the next three years in the case of Trump.

Similar to what happened to LIBRA, TRUMP’s market cap dived from a post-launch peak of around $15 billion to $3.2 billion at the time of writing.

This latest controversy could gain enough momentum to support a cause against the President of the U.S. amid potential violations of securities laws and regulatory guidelines concerning the sale of assets to retail investors without providing appropriate disclosures about the risks involved.

TRUMP Traps Bulls and Resumes its Decline

The TRUMP/USD 1-hour chart from Coinbase shows how the token briefly spiked above a key resistance level on Friday – just hours before the LIBRA situation unfolded. As the events progressed, the price of TRUMP dived and the downtrend resumed.

As a result, Friday’s move can now be interpreted as a bull trap, meaning that the short-term outlook for TRUMP is still bearish.

Investors may prefer to keep their hands away from political-themed assets to avoid being swept into unexpected losses emerging from these unexpected turns of events.

Moreover, momentum indicators seem muted, as the MACD has stood near zero after multiple weeks of pronounced highs and lows. Meanwhile, the Relative Strength Index (RSI) is on a clear downtrend, having already touched (briefly) oversold levels.

Even though this could be an indication that the trend could reverse, it is still too early to tell if this will be the case for TRUMP, as multiple failed breaks above the RSI’s signal line have already occurred along the way.

Traders should stay cautious in this kind of environment and follow the trend rather than trying to time a reversal.