Memecoins Surge as Retail Traders Shun Altcoins

Retail traders, driven by fear of missing out (FOMO), are increasingly favoring memecoins over altcoins, according to recent market trends. This shift in preference is largely influenced by the bullish or bearish sentiments of institutional investors, who often do not favor altcoins for long-term investment.

The crypto market has witnessed a delay in the rise of altcoins over the past two months, partly due to retail traders' FOMO-driven behavior. This phenomenon is not new, as a similar pattern was observed before the high recovery of 2021. The market identifies certain coins that may rally without actual participation, indicating the strength of the memecoin frenzy. However, market demand suggests that these price increases may only be temporary.

For instance, Algorand, with a trading price point of 0.28 USD, exhibited sharp growth, and its volume increased to 1.31 million. This favorable event led to the coin reaching a value of 1.46 USD for the first time in 2021. However, Chainlink, another popular altcoin, was reduced to 3860 on 10th February 2025, compared to around 11,280 tokens in circulation in 2021. The market's current sentiment indicates that altcoins may struggle to return to their previous heights.

Some coins, however, may fare better than others due to their unique features or high market cap, which can attract selective traders. Despite this, the overall altcoin market is down by 77%. As we move forward, it will be crucial to monitor the direction in which altcoins are headed to make informed investment decisions.