At the start of the week, the cryptocurrency market showed positive signs after a decline at the end of the previous week. Bitcoin initially rose to $68,500 on Monday, eventually reaching a 24-hour peak of $69,225. The renewed strength of Bitcoin helped recover losses from the weekend, which ended on a slightly disappointing note for Bitcoin enthusiasts.
The downturn in the market towards the end of the previous week was triggered by reports of the U.S Department of Justice investigating Tether. This caused a disruption in the positive sentiment that prevailed in the latter half of October. Tether’s CEO, Paolo Ardoino, quickly responded to the allegations, debunking the inaccurate reporting and stabilizing crypto prices across the market.
As the month draws to a close, analysts anticipate increased volatility in the crypto market. Factors such as Election Night in the U.S and the possibility of further Federal Reserve rate cuts are expected to contribute to this volatility.
Memecoins Take Center Stage while AI Tokens Lag Behind
In the fourth quarter, memecoins have become the talk of the town, attracting attention from speculators primarily based on sentiment rather than utility. Projects in this category have outperformed other cryptocurrencies in October.
Data from TradingView indicates that DOGE, POPCAT, and NEIRO have all seen significant gains of 40%, 49%, and 57% respectively this month, surpassing many major altcoins. Among the top 100 cryptos by market capital, only Raydium (RAY) from the Solana ecosystem has shown higher returns.
In contrast, AI-focused tokens have experienced losses in the same period. For instance, TAO, NEAR, and RENDER prices have dropped by 6.5%, 14%, and 19% correspondingly.
The divergent performance of memecoins and AI tokens underlines the cyclical nature of market trends. In previous quarters, AI tokens took the lead, driven by advancements related to Nvidia. The increasing popularity of newer memecoins like NEIRO and GOAT showcases the influence of retail-driven sentiment, where hype-driven narratives often overshadow fundamentals.
Storylines Set to Shape the Crypto Landscape in Q4
October has witnessed various crypto trends, including the convergence of AI and crypto applications. Nevertheless, memecoins continue to dominate the scene as investors pursue speculative opportunities over long-term fundamentals.
Recently, CryptoQuant’s founder, Ki Young Ju, noted a rising interest in memecoins, projecting that it could hit a new all-time high. Conversely, search interest in Bitcoin has declined significantly, reaching yearly lows during the same period.
The allure of memecoins stems from the potential for substantial returns for early investors, based on historical cycles. Trader fatigue from delays in realizing profits has also contributed to the heightened interest in these highly speculative assets.