The dominance of memecoins, currently edging towards 3%, reflects levels seen in mid-March when Bitcoin [BTC] reached its peak of $73K, alongside a total market cap nearing $2.7 trillion.
By the start of April, meme tokens’ market share peaked at 4%, driven by investors shifting their funds towards larger-cap tokens.
As the elections draw near, BTC is expected to attract substantial liquidity, sparking discussions on whether memecoins are on the verge of a significant uptrend. If historical trends hold true, we may witness the peak of the memecoin cycle by mid-November.
Memecoins Surpassing Altcoins
With 60% of the top 10 memecoins showing positive gains, it is evident that memecoins are attracting capital away from Bitcoin, while altcoins are struggling to garner comparable interest.
Leading the way is DOGE, registering a weekly increase of more than 24%, securing its position as the best performer in the last seven days. These spikes often indicate that the current cycle could be nearing its peak, as retail investors seek to hedge against volatility.
Nevertheless, this market cycle is being significantly influenced by macroeconomic factors, especially with the elections just around the corner.
A key driver behind Bitcoin’s surge towards its all-time high has been the $872 million flow from BlackRock in a single day, marking the highest daily inflow record. In contrast, ETH ETFs saw a modest $4.4 million inflow, reflecting subdued interest.
This pattern reinforces the earlier theory by CryptoCrypto: in line with previous cycles, memecoins are outperforming altcoins in attracting capital during this bullish phase.
For a full memecoin cycle to kick off, Bitcoin is likely to need to reach a market peak. Although net deposits on exchanges are currently high, suggesting increased selling pressure, the bullish MACD crossover indicates room for further growth before a significant correction.
With FOMO driving Bitcoin’s rise, a resistance level around $75K could become relevant post-election. If Bitcoin reaches a peak and then corrects, funds could flow into memecoins, potentially initiating a memecoin cycle by mid-November, as predicted by CryptoCrypto.
Is Buying the Dip Adviseable?
As previously mentioned, most memecoins are seeing substantial gains, with 6 out of the top 10 gainers in the past month belonging to the memecoin category.
However, for a complete cycle to unfold, it is essential for a sufficient number of holders to view the current prices as a favorable buying opportunity.
Interestingly, large DOGE holders, constituting 62%, have actively been acquiring significant amounts of DOGE tokens from exchanges over the last month.
This move aligns with the idea of an impending memecoin cycle, as they take advantage of the slump in altcoins and the expected spike in volatility once Bitcoin reaches its peak.
Hence, the prospects of a memecoin cycle emerging post-election seem promising. While these large holders capitalize on profits, their long-term dedication is crucial. With altcoins losing momentum and historical trends as a guide, memecoins could be poised for a notable rally ahead.