Currently, the share of memecoins in the cryptocurrency market has decreased to a record low. This is linked to Ethereum's rise and liquidity distribution changes.
Reasons for Decreasing Market Dominance
Recent data from CryptoQuant shows that the percentage of memecoins in the altcoin market has dipped to 0.039. Analysts attribute this decrease primarily to Ethereum's increasing dominance, which is capturing a significant portion of liquidity. This shift results in memecoins and many altcoins receiving a smaller investment share. A social media statement noted, 'Clearly, it is not the memecoin season; very few are performing well, and those are exceptional cases.'
Performance Comparisons and Cyclical Expectations
Since April, the total market capitalization of memecoins has increased by approximately 79.5%. However, this growth lags behind Ethereum's 215.91% surge during the same time. In August, Ethereum rose by around 25.41%, whereas leading memecoins like Dogecoin, Shiba Inu, and Pepe recorded limited gains. This divergence suggests Ethereum is attracting market liquidity, reducing memecoins' market share.
Is a New Memecoin Season Possible?
Experts predict future surges in the memecoin market. The market typically adheres to a four-stage cycle, with the second stage, dominated by Ethereum, currently in progress. Merlijn The Trader commented, 'We’ve waited years for this moment, and now we’re here. ETH just entered the 2nd stage of Ethereum season.' During the third stage, Ethereum continues to outperform Bitcoin, and large-cap altcoins gain momentum. The final stage sees market enthusiasm spreading across all altcoins, including memecoins.
Ethereum's increasing market dominance has led to a decline in the presence of memecoins. However, in the subsequent cyclical stages, memecoins may regain significant attention, contingent upon market conditions and investment distribution.
