The dominance of memecoins is swiftly approaching 3%, reminiscent of the levels seen back in mid-March when Bitcoin [BTC] skyrocketed to its record high of $73K, aligning with a total market cap nearing $2.7 trillion.
As the calendar flipped to April, meme tokens’ market share peaked at 4%, driven by investors shifting their funds towards high-cap tokens.
As the horizon of elections looms closer, BTC is expected to draw substantial liquidity, sparking discussions on whether memecoins are gearing up for a notable rally. If historical trends persist, we might witness the climax of the memecoin cycle by the middle of November.
Memecoins Surpassing Altcoins in Performance
With 60% of the top 10 memecoins showing gains, it is evident that memecoins are attracting liquidity away from Bitcoin, while altcoins struggle to garner similar attention.
Leading the charge is DOGE, with a striking weekly surge of over 24%, securing its position as the top performer in the last seven days. Generally, surges like these hint at the possible peak of the current cycle as retail investors start hedging against volatility.
However, this market cycle is witnessing a more significant impact from macroeconomic elements, primarily with elections looming just around the corner.
A prominent driver for Bitcoin’s ascent towards its ATH has been BlackRock’s staggering $872 million inflow in a single day, marking the highest daily influx on record. In contrast, ETH ETFs observed a modest $4.4 million inflow, signaling subdued interest.
This pattern echoes CryptoCrypto’s earlier assumption: akin to previous cycles, memecoins are outpacing altcoins in attracting funds during this bullish phase.
Nonetheless, for a complete memecoin cycle to launch, Bitcoin would likely need to reach a market peak. Current net deposits on exchanges remain elevated, indicating escalating selling pressure, yet the bullish MACD crossover suggests room for further upward movement before any significant correction.
With FOMO propelling BTC upwards, a resistance barrier near $75K might emerge post-election. If Bitcoin peaks and subsequently corrects, funds could flow into memecoins, potentially triggering a memecoin cycle by mid-November, as predicted by CryptoCrypto.
Is It Wise to Buy the Dip?
As noted earlier, most memecoins are witnessing substantial gains, with 6 out of the top 10 gainers in the past 30 days falling under memecoins.
However, for a complete cycle to materialize, it is crucial that enough holders validate this hypothesis by viewing the present price as a lucrative buying opportunity.
Interestingly, whales, constituting 62% of the significant DOGE holders, have been actively accumulating substantial volumes of DOGE tokens from exchanges in the past month.
This strategy aligns with the anticipation of an upcoming memecoin cycle as they capitalize on the downturn in altcoins and the expected surge in volatility once Bitcoin reaches its peak.
Hence, the prospects of a memecoin cycle emerging post-election appear promising. Nevertheless, while these whales reap profits, their long-term dedication is crucial. With altcoins losing traction, and if history repeats itself, memecoins could be gearing up for a robust rally ahead.