The market capitalizations of memecoins on Solana and Coinbase’s Ethereum layer-2 Base have experienced a significant decline in the past 24 hours, with both networks seeing a drop of 12% and 19% respectively.
This sell-off of memecoins coincided with a sharp decrease in the price of Bitcoin, which fell by 4.94% in the last 24 hours according to CoinMarketCap data.
One crypto analyst noted that it is common for memecoins to plummet when the price of Bitcoin falters, while another analyst attributed the bearish trend to the novelty of the humor wearing off.
Mati Greenspan, a crypto analyst and founder of Quantum Economics, commented on the situation, stating, “I guess it stopped being funny. Pretty fitting that the top came in on April Fool’s day. There is too much value in memecoins, it has to end at some point, it can’t continue indefinitely.”
According to CoinGecko, the market cap of Solana’s memecoins currently stands at $8.29 billion, representing a 12% decrease in the last 24 hours. The leading meme token on Solana, dogwifhat (WIF), experienced a 9% decline in market cap, resulting in a loss of $3.9 billion. Notably, WIF still accounts for almost half of the total memecoin market share on Solana.
On eight major crypto exchanges, WIF currently has a total open interest of $484 million. However, within the last 24 hours, $2.76 million in leveraged positions have been liquidated, including $1.89 million in short positions and $872,460 in long positions, according to CoinGlass data.
Base’s total market cap also dropped by 19% in the span of 24 hours, reaching $1.47 billion. The native token of the new Layer 3 network called “Degen” (DEGEN) on Base experienced the most significant decline, with a 26.14% drop in market cap to $436.5 million.
CoinMarketCap data shows that the total crypto market cap, which encompasses the value of all assets in the crypto sector, has decreased by 6.14% in the last 24 hours and currently stands at $2.45 trillion.
Greenspan suggested that while Bitcoin is finding strong support levels, memecoins are experiencing fluctuations beyond critical key price points. He added, “Bitcoin retracement is minuscule at the moment, memecoins are getting slaughtered.”
Bitcoin’s price dropped by 4.94% in the past day, trading at $65,910, while WIF’s price has decreased by 10.3% to $3.67.
Greenspan and other analysts attribute this phenomenon to the strong correlation that Bitcoin has over other cryptocurrencies in the broader crypto market. They note that when Bitcoin goes up, other coins tend to increase even more, and when Bitcoin goes down, other coins tend to decline more than Bitcoin.
Ran Neuner, a crypto analyst and Crypto Banter podcast host, stated in a post on April 2 that the memecoin market is approaching a saturation point.