Memecoins have been the talk of the town in the crypto world, with massive gains and millions of investors jumping in. However, recent data paints a different picture. With decreasing trading volumes and falling prices, on-chain data raises a crucial question for traders: Is the memecoin frenzy now a thing of the past?
On-chain data doesn’t lie. Daily trading volumes for major memecoins have dropped by nearly 60 to 70% compared to their peaks in March and April 2024. This spectacular decline is particularly evident in popular tokens like PEPE, FLOKI, and WIF, which had recorded exceptional performance during the last bull run.
Analysis of decentralized exchange platforms also reveals a significant slowdown. Liquidity pools dedicated to memecoins show consistent decline, indicating that market makers and institutional investors are gradually withdrawing from this segment. This liquidity contraction directly impacts volatility and increases slippage risks during large transactions.
The gloomy macroeconomic context is also weighing on risk appetite. Faced with uncertainty, traders now favor more established assets like Bitcoin and Ethereum, leaving speculative projects on the sidelines. This sector rotation fits within a classic market correction dynamic.
The total market capitalization of the memecoin sector tells a similar story. After reaching a peak above $120 billion, the combined market cap of memecoins now stagnates around $50 billion, reflecting widespread investor confidence loss. Smart money selling pressure has also accelerated in recent weeks.
This compression is partly explained by the absence of fundamental catalysts. Unlike DeFi protocols or Layer 2 infrastructure projects that provide real utility, memecoins rely essentially on community sentiment and viral effects. When collective attention shifts, these tokens quickly lose their appeal.
The daily emergence of new memecoins has also diluted attention and capital. It’s estimated that over 15,000 new memecoins were launched during the last quarter, saturating the market and fragmenting liquidity. This oversupply makes each individual launch less likely to generate the momentum necessary to attract significant investment.
The current situation doesn’t necessarily signal the definitive death of memecoins. The crypto market remains cyclical, and consolidation phases often precede new periods of euphoria. Some analysts point toward a possible comeback during the next bull cycle, driven by new narratives or technological innovations.
However, caution is now essential. Position sizing strategies become crucial: limiting memecoin exposure to 5-10% maximum of a portfolio seems reasonable in the current context.
Another solution is Pionex’s Hedging Bot, which allows generating 50-100% annual returns, even during crashes and bear markets. Memecoins like pengu, BONK, DOGE, SHIB, PEPE, SPX and many others are available right now with just a few clicks:
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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