In the past 24 hours, the total market capitalizations of memecoins on Solana and Coinbase’s Ethereum layer-2 Base have experienced a significant decline, with drops of 12% and 19% respectively across both networks.
This sell-off of memecoins coincided with a sharp decrease in the price of Bitcoin (BTC), which fell by 4.94% in the last 24 hours according to CoinMarketCap data.
Bitcoin’s decline of 4.94% in the past 24 hours was quite significant. (Source: CoinMarketCap)
According to some crypto analysts, it is common for memecoins to plummet when Bitcoin’s price falters. However, another analyst suggested that the bearish trend could be attributed to the humor associated with memecoins running its course.
Mati Greenspan, a crypto analyst and founder of Quantum Economics, commented on the situation, stating, “I guess it stopped being funny. Pretty fitting that the top came in on April Fool’s day. There is too much value on memecoins, it’s gotta end at some point, it can’t keep going forever.”
CoinGecko data reveals that Solana’s memecoin market cap has decreased by 12% in the last 24 hours, now standing at $8.29 billion. The leading memecoin on Solana, dogwifhat (WIF), saw a 9% decline in market cap, resulting in a loss of $3.9 billion. Remarkably, WIF still represents nearly half of the total memecoin market share on Solana.
On eight major crypto exchanges, WIF currently has a total of $484 million in open interest (OI). However, over the past 24 hours, $2.76 million in leveraged positions have been liquidated, including $1.89 million in short positions and $872,460 in long positions, as per CoinGlass data.
WIF experienced $2.29 million in liquidations, while Bitcoin had $172.54 million in the same 24-hour period. (Source: CoinGlass)
Base’s total market cap also dropped by 19% in the last 24 hours, amounting to $1.47 billion. The native token of the new Layer 3 network called “Degen” (DEGEN) on Base suffered the most, 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, has also experienced a 6.14% decrease in the past 24 hours. It currently stands at $2.45 trillion, according to CoinMarketCap data.
Greenspan suggested that while Bitcoin is finding strong support levels, memecoins are experiencing fluctuations beyond critical key price points. He added, “Bitcoin retracement is minuscule at the moment, memecoins are getting slaughtered.”
Bitcoin’s price dropped by 4.94% in the last day, reaching $65,910. Meanwhile, WIF’s price has decreased by 10.3% to $3.67.
Greenspan attributed this to the strong correlation that Bitcoin has with other cryptocurrencies in the broader crypto market. He stated, “It has directional correlation, when Bitcoin is up, they go up more, and when Bitcoin is down, they go down more than Bitcoin. This will hold up for a very long time.”
Charles Edwards, the founder of quantitative Bitcoin and digital asset fund Capriole, shared a similar view, stating that memecoins like these typically experience double the impact of Bitcoin’s downturns.
Ran Neuner, a crypto analyst and Crypto Banter podcast host, mentioned in an April 2 post that the memecoin market is approaching a point of oversaturation.