Shiba Inu Surges 11% as Memecoins Gain Traction

Bitcoin maintained its position above $87,000 during the Asian afternoon hours on Wednesday, as traders closely monitored U.S. data releases and the potential impact of U.S. tariffs set to take effect on April 2. The market sentiment was largely cautious, with most traders adopting a wait-and-see approach.

Major cryptocurrencies showed minimal changes over the past 24 hours. Solana’s SOL, XRP, BNB Chain’s BNB, and Ether (ETH) all experienced gains of less than 3%. However, memecoin Dogecoin (DOGE) stood out with a significant 5.5% increase, marking its second consecutive day of gains. This surge was accompanied by similar upward trends in other memecoins like Pepe (PEPE) and Mog (MOG), which continued to act as a "beta bet" on Ether’s strength.

Shiba Inu (SHIB) saw an impressive 11% surge, driven by a shift towards riskier memecoins and a 228% increase in its native ShibaSwap exchange over the past 30 days. The open interest on SHIB-tracked futures has risen by over 20% since Sunday, indicating expectations of further volatility in the market.

Despite these gains, concerns about a potential U.S. economic slowdown persist. The rapid unwinding of momentum trades in equities has led some money managers to adopt a fully defensive stance. Analysts expect markets to continue their soft rebound from last week into month-end, with the next major catalyst being the reciprocal tariff announcement scheduled for April 2. Rumors of a softer tariff response could help recover some of the recent technical damage in U.S. stocks, potentially sparking a global rally.

Cryptocurrencies are expected to remain closely tied to equities in the near future, as there are no unique catalysts on the horizon. However, recent mergers and acquisitions, such as those involving Coinbase and Kraken, have bolstered confidence in the long-term bull market for cryptocurrencies.

Traders at QCP Capital noted that the upcoming quarter, particularly April, has historically been one of the best periods for risk assets, second only to the festive December rally. The S&P 500 has delivered an average annualized return of 19.6% in the second quarter, while Bitcoin has recorded its second-best median performance during this period, trailing only the fourth quarter. However, options traders remain cautious, with call skew only emerging from June onwards, suggesting that traders are waiting to see how the tariff situation develops.

Attention is now turning to the Personal Consumption Expenditure (PCE) data, which could become the next key catalyst for the market. The PCE index captures inflation or deflation across a wide range of consumer expenses and reflects changes in consumer behavior. Released monthly, the PCE influences Fed interest rate decisions. High PCE readings signal rising inflation, potentially prompting rate hikes to cool the economy, which can reduce risk appetite and pressure Bitcoin prices downward. Conversely, low PCE data suggests tame inflation, possibly leading to rate cuts or steady policy, boosting liquidity and supporting Bitcoin’s price as a speculative asset or inflation hedge.

The next PCE release is scheduled for March 28 and could significantly sway market sentiment. Bitcoin’s reaction will be closely tied to how the data shapes Fed expectations, with volatility often following as traders adjust their positions.