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The Impact of Market Volatility on Meme Coins
During the current market lull, meme coins have been a topic of interest due to their performance. In the last 24 hours, however, this trend seems to have shifted as the top meme coins have experienced significant losses compared to Ethereum.
Performance of Top Meme Coins
- Dogecoin: Legacy meme coin Dogecoin has witnessed a 6.8% drop in the past day.
- Shiba Inu: Shiba Inu slipped by 5.5% during the same period.
- Dogwifhat: Dogwifhat experienced a substantial decline of 12.3%.
- Pepe and Book of Meme: Other meme coins such as Pepe and Book of Meme saw declines of 7.3% and 9.6%, respectively, according to CoinGecko data.
The Meme Supercycle and Institutional Interest
Notably, this downturn comes after what some have referred to as a meme supercycle, during which institutional investors began to view meme coins as a viable investment option. One example of this shift was seen with Solana, which saw a surge in meme coin popularity, with tokens like Dogwifhat gaining significant attention before experiencing a downturn.
Solana’s latest standout performer, Popcat, has risen by an impressive 35.5% over the past week. However, even this promising addition to the meme coin market was not immune to the recent market volatility, losing 12.9% in the last 24 hours.
Solana itself had risen by 20.9% over the past week, bolstered by the strong performance of meme coins. However, the recent market downturn has seen Solana drop by 7.7% in the last 24 hours.
Impact on Ethereum and Institutional Investments
While Ethereum has experienced a more moderate decline of 4.0%, it is worth noting that meme coins have taken a more significant hit. Ethereum has now dropped below the $3,000 mark for the first time since May 2.
Interestingly, CoinGlass data reveals that over $24 million in long positions for Ethereum were liquidated in the past 24 hours, with total liquidations reaching $27 million when including short positions.
These developments coincide with the recent decision by Grayscale to withdraw its application to convert its Grayscale Ethereum Trust (ETHE) into a spot ETF, mirroring a similar process undertaken with its Grayscale Bitcoin Trust.
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