After one of the biggest sell-offs in crypto history, digital assets have started to recover. A new wave of buying sent both memecoins and major tokens higher, driven by an easing of tensions between the United States and China as well as a rebound in general market sentiment.
In brief
- The memecoin market cap reaches $68.8 billion, with Dogecoin, WIF, and PENGU leading double-digit gains.
- Bitcoin recovers to $115,227 after flash crash; major altcoins like ETH and SOL too.
- Arjun Vijay calls the crash a “temporary glitch”, caused by cascading liquidations and leverage.
- Analysts say the correction cleaned up excess leverage, setting the stage for a stronger market recovery.
Top memecoins explode as crypto market recovers from massive sell-off
Memecoins saw a sharp recovery on Monday as crypto markets rebounded from one of the worst liquidation events in recent history. The sector's total capitalization climbed to $68.8 billion, up 12.6% on the day, according to market data.
Here's how the top memecoins performed during the session:
- Dogecoin (DOGE) jumped 11.9% to trade at $0.21, leading the memecoin rally.
- Dogwifhat (WIF) recorded the biggest gain, soaring 18.4% in 24 hours.
- Pudgy Penguins (PENGU) followed closely with a 17.5% rise as traders returned to riskier assets.
- Pepe (PEPE) also advanced, gaining 13.2% amid renewed market momentum.
- Bonk (BONK) climbed 15.3%, extending its strong performance from last week.
- Shiba Inu (SHIB) added 9.4%, complementing the memecoin sector's broad recovery.
The strong performance of memecoins reflects a renewed appetite for risk after last week's market turmoil.
Friday's sell-off wiped out nearly $20 billion in digital asset positions, with Bitcoin (BTC) plunging from 121,000 to as low as $109,000 in a single day. As of Monday morning, BTC had recovered to $115,227, up 2.9%, while major altcoins also advanced—Ethereum (ETH) rose 8.4%, BNB (BNB) gained 12.2%, and Solana (SOL) added 8.7%.
Arjun Vijay calls flash crash a 'temporary glitch' as Memecoins lead recovery
Arjun Vijay, founder of crypto platform Giottus, said the rebound was expected after the recent “flash crash”. He explained that cascading liquidations caused the previous fall and that high-risk assets, such as memecoins, typically recover the fastest during market rallies.
The flash crash was a temporary glitch caused by cascading liquidations, and everyone was waiting for a rebound. During the rebound, the riskiest assets and those that have fallen the most are expected to rebound as much as possible. It is therefore not surprising that people are banking on memecoins, which creates a virtuous cycle.
Arjun Vijay
The crash was triggered by President Donald Trump's announcement of a “massive increase” in tariffs on Chinese imports, as well as the cancellation of a planned meeting with President Xi Jinping.
As expected, the move sparked fears of renewed trade tensions, sending global markets lower and fueling selloffs in crypto platforms. However, the feeling improved over the weekend.
Crypto Correction Eliminates Excessive Leverage, Paving the Way for a Stronger Market
A Chinese Commerce Ministry spokesperson accused the United States of unfair trade actions and excessive export controls. Trump later took a more conciliatory tone on Truth Social, indicating that the United States wants to support, not harm, China.
Predictive markets on Myriad always only award 9% chance Trump will visit China before the end of the year, reflecting continued uncertainty.
Despite the volatility, market participants believe that the correction could ultimately strengthen the crypto ecosystem. Charmaine Tam, head of OTC sales and trading at Hex Trust, called the event a “healthy reset”.
Tam noted that the recent market drop helped remove excessive leverage from the system, describing this as a constructive correction that could strengthen the market over time. She added that the institutional infrastructure remained stable during the volatility. With Bitcoin dominance remaining below 60.5%, altcoins could now be in a position to lead the market as liquidity returns.
As risk appetite improves and geopolitical concerns fade, memecoins appear to be leading the recovery—once again proving their ability to capture momentum whenever markets turn.
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