A quick scroll through social media platforms will leave you feeling the buzz of the recent resurgence of memecoins from the dead. Sentiment seems strongly positive, and users have forgotten the choppy price action of the last few weeks. If you're one of the holders of these rallying memecoins, you might need to have your dancing shoes handy before you check your wallet.
According to CoinGecko data, memecoins like $MOODENG and $GOAT have experienced a 536% and 194% increase in price, respectively, over the past week. $PNUT is not far behind, being 152% up over the same period. This has caught retail traders' attention and made meme enthusiasts wonder if this is the resurgence of memecoins they have been waiting for.
Memecoins are built on hype, and right now, they are all the rage on social media with posts about how “memes are so back” populating the timeline faster than one can scroll.
What is Happening Onchain?
According to Blockworks Analytics, the memecoin DEX volume rose from 46.95% on March 1st to 60.1% on May 1st, representing a 13.95% increase in memecoin DEX volume over that period.
Memecoins are following the general crypto market, which seems to be on an upward trajectory as Bitcoin reclaimed $100k and Solana hit $180. However, it surely helps that $MOODENG and $GOAT were listed on Binance Alpha, and there have been rumors of a $BONK ETF after the launch of the $BONK ETP last year. The listings and the hype of a potential ETF are just the right narratives that drive memecoin appreciation. Talk about impeccable timing!
Traders Starting to Take Risks
The question on everyone’s minds is whether this is just another one of those brief rallies or a sign of good things to come regarding price action. Traders don't appear to be paying attention to that, though. According to CoinMarketCap’s Crypto Fear and Greed Index, the general sentiment indicates ‘Greed’ as the emotional state of the market. The index itself is at 73, which is almost at the threshold of ‘Extreme Greed’.
This indicates an increased risk appetite among traders and investors alike. In greedy markets, traders increase risk by allocating more capital to volatile altcoins and using higher leverage, driven by the expectation of high returns and the belief in a continuing uptrend. This is evidenced by the Solana memecoin marketcap appreciating by over 4% to $14.2 billion in the past 24 hours alone.
It's easy to get lost in the euphoria of the sudden pumps, but it is essential to remember that most of these memecoins are still very far off their previous highs. For example, $MOODENG may be more than 500% up this week, but its present price pales in comparison to its all-time high of $0.68 achieved in November 2024. This indicates a nuanced scenario. On the one hand, there's a lot of momentum going for memecoins right now. On the other hand, there's still some way to go before reaching previous peaks. This can be seen as either positive or negative depending on your conviction (and your bags).
What Next?
Whether this rally can be sustained in the medium to long term remains to be seen. No one can tell for sure the position we are in regarding the general cryptocurrency cycle. If this momentum is sustained and we don't get another black swan event that nukes the whole industry, meme coins (and, by extension, altcoins) might just be back.
As always, proceed cautiously, but the memecoin market has certainly recaptured the spotlight.
Learn more: What Are Memecoins?
