The cryptocurrency market has experienced its fair share of ebbs and flows, but the recent downturn in Bitcoin (BTC) and Solana (SOL) has sent shockwaves through the entire industry.
While Bitcoin’s troubles are well-known, it is the meme coin sector that has taken a particularly hard hit this week. With the overall meme coin market cap crashing from $67.9 billion to $56.5 billion, many tokens in this industry niche are feeling the pressure, with some experiencing not just significant losses in price, but also in trading volume.
This week has not been good for the meme coin sector. Several catalysts have chipped away at its recent gaggles of gains and left it standing in the gales of uncertainty. The total meme coin market cap peaked this week at around $68 billion. If you check it now, it has slipped to $56.5 billion, shedding a total of more than $11 billion since our last checkup. The volume, too, has been hit with a serious haircut that isn’t making it any happier.
This downturn can be largely ascribed to the steep fall in two essential assets: Bitcoin and Solana. Solana, in particular, has been affected most severely, dropping a stunning 50% from its all-time high (ATH) of $295 in January. As one of the top-performing blockchains, its sudden downturn has led to substantial collateral damage throughout the broader crypto ecosystem, including meme coins.
Compounding the problem, the trading volume for the once-popular meme coin Pump(.)fun has plunged 94%, from a daily high of $89.5 million to a scant $5.03 million. This huge tumble in trading activity underlines the ho-hum atmosphere surrounding meme coins. It also shows that a fair number of enthusiasts have either retreated to safer investments or opted out of the market altogether.
This week, some of the meme coins have been truly impressive. Even as many cryptocurrencies face a downward trend, a handful of meme coins have risen remarkably through this period of turbulence.
This week, the biggest winner was PNUT, which skyrocketed by 39.85%. It was a strange reversal because, overall, the whole market was trending down, and even some supposed “safe” cryptocurrencies weren’t so safe after all.
In fact, PNUT’s gain was far larger than any other coin. While many saw PNUT as a meme coin rebound, some have also noted that it, much like certain other coins, is still following the previous trend of capturing late-night internet attention. Even in a bearish market, few coins still manage to capture the interest of investors.
Other notable gainers include POPCAT (+14.76%) and AI16Z (+12.12%), both of which have managed to retain some positive momentum in a week full of downturns. Their performance, however, is quite modest compared to the astronomical ascent of some meme coins recently. Still, at least for now, it seems there’s some life in the sector.
Conversely, the losers have witnessed considerable price decreases. MELANIA (-29.47%), TRUMP (-21.69%), and DOGE (-20.36%) have all taken substantial hits, mirroring the overall mood in the meme coin marketplace. Even though Dogecoin (DOGE) remains one of the front-runners among meme coins, the 20% drop it experienced this week is a stark reminder of just how unstable this particular corner of the crypto universe is.
The current market chaos has several contributing causes, and they’re not all confined to the realm of meme coins. One of the week’s main market-moving narratives has concerned the internal squabble at Pump(.)fun, which has been testing its own Automated Market Maker (AMM). This incident, along with a 25% loss in the value of RAY, has meme coiners absolutely beside themselves with worry.
Also, Dave Portnoy’s activities involving meme coins have aggravated things, bringing the Greed Index down to a new low. Portnoy’s star power and his recent meme coin forays have been met with a fair bit of skepticism. Amongst the Portnoy critics, there’s often a sense that if he keeps doing what he’s doing, he can only end up adding more uncertainty to the market. In reality, that’s a Portnoy skepticism feed that builds on itself.
Compounding the troubles is the potential that the notorious cybercrime syndicate Lazarus Group is laundering stolen Bybit hack funds through meme coin scams. If that’s the case, then it’s not just the Bybit hack that we should be worried about. It’s also the whole meme coin ecosystem. And it’s definitely not the state of fear and uncertainty we’re in that makes markets more conducive to scams.
Despite the market’s overall decline, the meme coin sector has, interestingly, outperformed Solana this week. Solana’s 50% drop from its January ATH has significantly impacted its ecosystem. The meme coin space has shown some resilience, though. And it’s still down 30% over the last 30 days.
Tokens associated with memes and powered by AI are showing some signs of life, with a few like AI16Z making modest gains. These tokens may well represent the future of meme coins, as the escalating interest in artificial intelligence could well serve up a new wave of growth for this sector.
It’s vital to recognize, though, that the meme coin realm is still suffering from huge losses. The majority of meme tokens have seen their values plunge to 80-90% beneath what they were at their all-time heights; that extreme amount of volatility doesn’t necessarily make it easy to forecast any kind of recovery in the meme coin section of the crypto market.
The meme coin market now writ large encompasses some 1,000 assets, with a combined cap of $19 billion. More than 60 percent of that value, however, is propped up by Dogecoin and Shiba Inu, two assets among the current 30 largest tokens by market cap. On CoinMarketCap, another 29 tokens are listed as meme coins.
Within the volatility of the larger cryptocurrency market, the meme coin sector seems most at the whim of market sentiment. The future of meme coins probably will depend on a number of external factors: regulatory developments, say, or technological advancements. Right now, many investors seem to be teetering between fear and greed, unsure what the next move will be. The meme coin market seems to have very much returned to the conditions of 2022—speculative and largely driven by social media.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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