DOGE, SHIB, PEPE, WIF soar as meme coins prove to be a global shelling point for speculative liquidity
- Meme coins are on fire, posting double-digit gains as the market continues on its bullish streak.
- Dogecoin, Shiba Inu, Pepe, and Dogwifhat, the meme coin top-four are on fire, leading sector tokens north.
- Traders are calling top on meme coin season when BTC has not even crossed its $69,000 peak yet.
Meme coins are on a tear, recording striking gains as the sector continues to outperform the market. It comes amid an ongoing bull market, with some analysts saying this could just be the beginning. Bitwise CIO Matt Hougan said he expects a new wave of capital inflow into the BTC exchange-traded funds (ETF) market, effectively driving Bitcoin price further north.
Meme coins are on fire
While the market is just warming up for an expected bull market, meme coins are exploding with remarkable gains. Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), and Dogwifhat (WIF) lead the pack with 18%, 56%, 52%, and 35%. Bonk Inu (BONK) is also in the competition with 10% gains as Floki Inu (FLOKI) records the highest gains above 70%.
DOGE/USDT 1-day chart, SHIB/USDT 1-day chart, PEPE/USDT 1-day chart
An October report by WazirX detailed three reasons why meme coins tend to rally with Bitcoin.
- Meme coins are very popular among retail investors who are drawn to the sector tokens’ fun and exciting nature. When the market is broadly bullish, these types of investors tends to be drawn to meme coins leading to growing demand.
- This sector’s tokens have fair market capitalizations, which means even a relatively small capital inflow can have a significant impact on the price of a meme coin. “A sudden surge in investment can trigger significant price surges.”
- Meme coins make for communities that are defined by high engagement. Increased activity, inspires enthusiasm and therefore demand.
With these, meme coins tend to benefit from the bullish trend seen with Bitcoin price. Fortune indicates that when meme coins pump alongside BTC, it is often an indication that the “crypto bubble is back.”
Investor call top on memecoin season as Bitcoin price eyes $69,000
As it happens, investor interest in meme coins continues to grow, seen as sector tokens are pumping hard. One trader and analyst, @Rewkand on X says, “People are really calling top on memecoin season when BTC hasn't even crossed ATH yet.”
With meme coins proving to be a global shelling point for speculative liquidity, their accessibility remains one of the sector’s greatest strengths, which explains community engagement. During the last cycle, the total market capitalization of meme coins was around $100 billion. Despite BTC not having reclaimed its $69,000 peak, and the halving event expected to kickstart the next bull market standing around 48 days out, meme coin market capitalization is now upwards of $40.77 billion.
Cognizant that the meme coin markets usually record highs in market capitalization each cycle, the sector could perform even better once the bull market officially catches steam. This is because, as Hougan put it, retail traders and hedge funds are already at play, but institutional players still have to bring their own wave of capital.
The next wave of institutional buying could push the Bitcoin price substantially higher.
Nevertheless, the meme coin market is also very volatile, which explains the frequent undervaluation despite strong communities for individual projects in the sector. Cautious optimism is therefore key as DOGE, SHIB, PEPE and WIF walk the thin line between prosperity and uncertainty.
Also Read: Robinhood to list Dogwifhat as WIF tags $1: Is Coinbase next?
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
