The past 24 hours have seen a sharp downturn in the total market capitalizations of memecoins on Solana and Coinbase’s Ethereum layer-2 Base, with both networks experiencing significant drops of 12% and 19% respectively. This plunge coincided with a notable decline in the price of Bitcoin, which fell 4.94% during the same period, according to data from CoinMarketCap.
The phenomenon of memecoin sell-offs during Bitcoin price declines is not new in the crypto sphere. However, opinions vary among analysts regarding the recent bearish trend. While some attribute it to the typical correlation between Bitcoin and memecoins, others suggest that the humor and novelty associated with these tokens may be wearing thin.
Mati Greenspan, a crypto analyst and founder of Quantum Economics, shared his perspective on the matter. “I guess it stopped being funny,” he told Cointelegraph, noting the timing of the market top coinciding with April Fool’s Day. Greenspan emphasized the unsustainable nature of the value built into memecoins, suggesting that a correction was inevitable. “There is too much value on memecoins, it’s gotta end at some point, it can’t keep going forever,” he added.
Solana’s memecoin market cap took a hit, dropping by 12% to $8.29 billion within the past 24 hours, as reported by CoinGecko. The leading meme token on Solana, dogwifhat (WIF), saw a significant decline of 9% in its market cap, representing a loss of $3.9 billion. Despite this drop, WIF still holds a dominant position, constituting nearly half of the total memecoin market share on Solana.
Looking at open interest across major exchanges, WIF boasts $484 million, but recent data from CoinGlass indicates that leveraged positions worth $2.76 million were liquidated in the last 24 hours. This includes both short positions amounting to $1.89 million and long positions totaling $872,460.
Coinbase’s Ethereum layer-2 Base also faced a substantial downturn, with its total market cap decreasing by 19% to $1.47 billion within 24 hours. The native token of the newly introduced Layer 3 network “Degen” (DEGEN) on Base experienced the most significant drop, losing 26.14% of its market cap to settle at $436.5 million.
The broader crypto market hasn’t been immune to these fluctuations, as evidenced by a 6.14% decline in the total crypto market cap over the past day, now standing at $2.45 trillion according to CoinMarketCap data.
Greenspan highlighted the contrast between Bitcoin’s relatively minor retracement and the drastic fluctuations seen in memecoins. “Bitcoin retracement is minuscule at the moment, memecoins are getting slaughtered,” he remarked.
Bitcoin’s price fell by 4.94% in the last 24 hours, settling at $65,910, while WIF experienced a steeper decline of 10.3%, trading at $3.67.
The recent market dynamics underscore the volatile nature of cryptocurrencies and the unique challenges faced by tokens driven by humor and novelty. As investors navigate these fluctuations, the resilience of major cryptocurrencies like Bitcoin against broader market trends continues to be a topic of keen interest and analysis within the crypto community.
