Cryptocurrencies inspired by internet memes, memecoins are currently experiencing a delicate period on the market. These assets have seen a significant decline over the past 24 hours. A performance that some crypto analysts attribute to recent bitcoin price movements.
Sudden drop in memecoin market capitalization
The market capitalization of memecoins has seen a dramatic decline, with notable declines for tokens on the Solana and Base networks, of 12% and 19% respectively. On the Solana network, the leading memecoin, Dogwifhat, saw its value drop 9% in one day, resulting in a loss of $3.9 billion.
Despite this decline, Dogwifhat maintains a significant share of the memecoin market on Solana, with $484 million in open stakes spread across eight crypto exchanges. More than $2.7 million in leveraged positions were liquidated in 24 hours, reflecting market volatility.
The Layer 2 Base network was not spared from this storm, with a 19% reduction in its total market capitalization, falling to $1.4 billion. The DEGEN token was particularly affected. The crypto suffered a 26% drop and saw its capitalization fall to $436 million. This downtrend mirrors a broader correction in the crypto market, where the total market capitalization declined by 6% to $2.45 trillion.
A link between the evolution of the prices of the flagship crypto and memecoins?
Several crypto analysts are convinced that there is a correlation between the price movements of bitcoin and those of memecoins. If bitcoin saw a reduction of 4.94% in its value, the memecoin WIF also fell by 10%. The same is true for several other memecoins.
Mati Greenspan, analyst and founder of Quantum Economics, pointed out that these cryptos tend to exaggerate the price movements of bitcoin. This trend may lead to more extreme price fluctuations in memecoins compared to those of bitcoin. Greenspan noted that although bitcoin enjoys strong support levels, the volatility of memecoins often exceeds critical thresholds, accentuating their instability.
The simultaneous decline of bitcoin and memecoins illustrates the market's dependence on the trends of the queen of cryptos. Analysts note that the direction bitcoin takes significantly influences the price movements of other cryptos, including memecoins.
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