The market capitalizations of memecoins on Solana and Coinbase’s Ethereum layer-2 Base have experienced a significant decline in the past 24 hours, dropping by 12% and 19% respectively. This decline coincided with a sharp drop in the price of Bitcoin, which fell by 4.94% during the same period. According to analysts, memecoins tend to plummet when the price of Bitcoin falters, but another factor could be that the humor associated with memecoins is simply losing its appeal.
Mati Greenspan, a crypto analyst and founder of Quantum Economics, stated that there is too much value invested in memecoins and that it can’t continue indefinitely. He also noted that the decline in memecoins on April Fool’s Day was quite fitting. Solana’s memecoin market cap now stands at $8.29 billion, representing a 12% decrease in the past 24 hours. The leading meme token on Solana, dogwifhat (WIF), saw a 9% decline in market cap, losing $3.9 billion. WIF still accounts for nearly half of the total memecoin market share on Solana.
Base’s total market cap also dropped by 19% to $1.47 billion. The native token of the Layer 3 network called “Degen” (DEGEN) on Base experienced the largest decline, with a 26.14% drop in market cap to $436.5 million. The total crypto market cap, which represents the value of all assets in the crypto sector, also took a hit, decreasing by 6.14% to $2.45 trillion.
Greenspan noted that while Bitcoin is finding support at strong levels, memecoins are experiencing fluctuations beyond critical price points. He emphasized the directional correlation between Bitcoin and other cryptocurrencies in the market, stating that when Bitcoin goes up, memecoins go up even more, and vice versa.
Charles Edwards, the founder of Capriole, a fund specializing in Bitcoin and digital assets, shared a similar perspective. He stated that memecoins like these are highly influenced by Bitcoin and tend to experience double the impact of Bitcoin’s downturns. He also suggested that the hype surrounding Solana and Base ecosystems may not have as much tangible value as Bitcoin and Ethereum.
Ran Neuner, a crypto analyst and host of the Crypto Banter podcast, mentioned in a recent post that the memecoin market is approaching oversaturation. This could indicate that the market for memecoins is becoming overcrowded and may be due for a correction.
The memecoin hype train might be slowing down.
The decline in memecoins on April Fool’s Day seems fitting. Maybe it’s a sign that the joke is over.
This decline might be a chance to find some good buying opportunities. 💸
Memecoin market cap dropping by 12%? Looks like the humor is running dry.