Ethereum News Today: Memecoin Market Loses Share as Ethereum Absorbs Liquidity

The memecoin market has seen a significant decline in market share as capital shifts toward more established cryptocurrencies, particularly Ethereum. This trend has been driven by a broader altcoin correction, with many memecoins struggling to maintain relevance amid growing investor preference for projects with stronger fundamentals and clearer technical momentum. The total memecoin market cap currently stands at $70.74 billion, showing a modest 2.64% gain in the latest trading session, though it remains below the July peak of $80 billion [1].

The shift in market dynamics highlights a growing selectivity among traders, who are increasingly steering capital away from high-volatility tokens lacking strong catalysts. Analyst Darkfost has noted that the current market environment is “clearly not memecoin season,” emphasizing that Ethereum has absorbed significant altcoin liquidity, reducing memecoins’ market dominance [1]. This liquidity vacuum has pushed most memecoins well below their recent highs, with only a few managing to deliver notable gains [1].

Ethereum’s dominance has created a challenging environment for the memecoin sector. According to Darkfost, the ongoing absorption of liquidity by Ethereum and other major altcoins has steadily reduced memecoins’ market influence. This development signals a fundamental change in market preference, with attention and capital increasingly concentrated on assets that demonstrate both technical and fundamental strength [1]. Traders are being warned to approach the memecoin sector with caution due to the absence of the hype cycles and speculative inflows that historically fueled sharp price rallies in this asset class [1].

Technically, the memecoin market has entered a consolidation phase following the sharp rally in July. Chart patterns indicate that the sector has struggled to sustain upward momentum, with repeated rejections at higher levels. The 50-day simple moving average, positioned near $66.57 billion, has acted as a key support level, with recent pullbacks showing increased buying interest around this zone. However, the market remains under seller control above the $75 billion threshold, and a stronger recovery will require the sector to reclaim and hold this level. A breakdown below the 50-day SMA could trigger a deeper correction toward the $64–65 billion range [1].

Looking ahead, the coming weeks will be crucial for the memecoin sector. If Ethereum continues its upward trajectory and broader altcoin markets rally toward their range highs, there may be some spillover effect that reignites interest in memecoins. However, without a significant shift in sentiment and liquidity distribution, the sector is likely to continue underperforming relative to the broader market. Traders are advised to focus on assets with stronger technical setups and more compelling fundamental value propositions, rather than speculative memecoin plays [1].

The memecoin market remains in a precarious position, with its $70 billion valuation representing a consolidation phase rather than a breakout. A meaningful recovery will depend on renewed speculative interest and broader market conditions. For now, the sector appears to be in a defensive posture, with Ethereum and fundamentally stronger altcoins capturing the lion’s share of liquidity and attention [1].

Source: [1] Memecoins Lose Market Share As $70 Billion Sector Struggles Against Ethereum (https://coinmarketcap.com/community/articles/68a02a0f1b132b70abca421d/)