Memecoins Plunge 2.3% as Crypto Market Drops 1.14%

Memecoins, a category of cryptocurrencies known for their humorous or satirical themes, have experienced a significant downturn in the past 24 hours. Five of the top 10 underperforming assets today were memecoins, including PENGU, FARTCOIN, and BRETT. The memecoin sector dropped 2.3% in 24 hours, falling from a top-performing category to one of the weakest.

The overall crypto market has also slipped further into red territory, shedding 1.14%. Major token categories recorded a 6.10% loss during this period, bringing the total market cap to $66.10 billion. This widespread market stress has led to riskier assets, such as memecoins, being hit the hardest.

According to the top gainers and losers list, the majority of the market’s biggest losers over the past 24 hours are memecoins. Five out of the ten top underperformers are memecoins: Bonk [BONK], Floki [FLOKI], Pudgy Penguins [PENGU], Fartcoin [FARTCOIN], and Brett (Based) [BRETT], which have declined by 12.28%, 10.20%, 9.95%, 9.16%, and 9.10%, respectively. This implies that market investors are more bearish than ever, prompting widespread sell-offs.

This bearish sentiment is reflected in the decline in market volume. Over the past 24 hours, the market cap dropped to a new weekly low of $65.53 billion, but later saw a slight recovery to $66.10 billion. While price dips tend to attract dip-buyers, that hasn’t been the case here. That’s because trading volume cratered 27.23% alongside price, signaling not just panic, but hesitation. It suggests sellers are exhausted, but buyers aren’t stepping up either.

Several factors drove memecoin losses over the past 24 hours, including a drop in the Altcoin Season Index. Traders use the Altcoin Season Index to gauge the likelihood of a market rally among crypto assets, excluding Bitcoin. When the index reads high, it signals that altcoins are more likely to rally, as more liquidity enters the market. A lower reading suggests a liquidity outflow. This index has dropped from a high of 43 to its current level of 22, indicating that confidence is waning, and that selling pressure is increasing.

Lower readings imply capital is flowing out of altcoins and back into stable assets, or simply off the table. Having said that, it’s not just about sentiment; sector rotation is also in play. The Sector Performance data tracks how a specific market category has performed over time. Although memecoins led the market last month with a growth rate of 46.8%—making it the sixth highest-performing sector—that trend has reversed. As per press time, the memecoin sector ranks as one of the most underperforming, with a 2.3% decline in market value. If this selling trend continues, memecoin prices will likely remain low, with more investors taking on losses.