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It's looking like it's "game over," for GameStop (NYSE:GME) stock. Sure, the company isn't going anywhere anytime soon thanks to all the capital it managed to raise this year. However, the hopes of (another) short squeeze in GME stock are evaporating. To that point, the squeeze is now going in the wrong direction. GameStop shares slumped from $247 on November 22 to as low as $160 on Friday. That's a more than one-third decline in two weeks.

What's going on here? Simply put, it appears the meme community is starting to lose faith in the cause. And, GameStop was far from the only meme stock in retreat.

The software and tech stocks in particular got walloped. DocuSign (NASDAQ:DOCU), a leading digital software tool, saw shares collapse Friday, plunging more than 40% following downbeat earnings. DocuSign had been worth $75 billion in market capitalization at one point. It's barely worth a third of that now.

With traders having to reevaluate their holdings, the weakest of the bunch — such as the meme stocks — are being cast aside as folks move to safer waters.

The Buzz Is Fading

This spring, a savvy fund manager launched the VanEck Vectors Social Sentiment ETF (NYSEARCA:BUZZ). The BUZZ ETF is "designed to identify the U.S. common stocks with the most "positive insights" collected from online sources including social media, news articles, blog posts and other alternative datasets."

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Basically, the Buzz ETF looks around places such as Reddit and StockTwits to see what people are posting favorably about. The companies with the most positive social media attention are added to the fund. Not surprisingly, GameStop is one of the top 10 holdings in the fund along with other trader favorites such as Tesla (NASDAQ:TSLA) and Nvidia (NASDAQ:NVDA).

Barstool Sports leader and influential stock trader Dave Portnoy partnered with Buzz to help get the word out. In March 2021, it seemed like an ETF to capture the spirit of the moment. However, shares largely moved sideways since the launch of the fund, as the big short squeezes had already played out back in January in stocks such as GameStop.

And now, with stocks in retreat, traders are hammering the meme names. This has lead the BUZZ ETF to lose 15% of its value since the beginning of November. While GameStop's slide has been especially speedy, make no mistake, there's an exodus out of most stocks that were Reddit darlings throughout 2021.

Prepare For Winter

At the heart of things, macroeconomic conditions have changed. A year ago, social media was awash with jokes about stimulus checks and Federal Reserve printers that went "brrrr". In a world full of easy money, it wasn't hard to pump up companies with dubious fundamentals, such as GameStop.

But monetary conditions are tightening now. The Federal Reserve has launched its tapering program to fight inflation, and may start hiking interest rates as well. Money isn't free anymore. In addition, the Treasury's stimulus is winding down. Many Covid-19 related relief programs have ended. Meanwhile, the long-awaited Build Back Better infrastructure funding package ended up being far smaller than investors had hoped for.

Long story short, traders can't rely on the government creating more new money to bail out struggling assets. That was the monetary regime in 2020 and the first half of 2021. But with inflation starting to rear its head, the money printers are going silent. Given that change, the flimsiest assets, such as chronically money-losing firms like GameStop, are set to see the sharpest reversal of fortunes.

GME Stock Verdict

Just recently, I warned that the fun was ending for GME stock. Amid worsening fundamentals, it was hard to see any realistic path to upside for GameStop shares. The company's digital transformation simply isn't moving at anything close to a fast enough pace to maintain investor enthusiasm. Meanwhile, the meme community appears to be losing conviction around GameStop and other associated short squeeze names.

These factors came to a head even faster than I had imagined. The recent stock market tumble has jolted a number of former WallStreetBets favorites. And things appear set to escalate as flash crashes have hit key meme cryptocurrencies such as Dogecoin (CCC:DOGE-USD) as well. There's simply not enough money out there to prop up all the different buzzy trades out there. Against that backdrop, look for traders to keep locking in their GME stock gains before they slip away.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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