In recent developments within the cryptocurrency sector, memecoins have witnessed a significant decline in their market share, reaching the lowest point observed in a year and a half. Experts are attributing this downtrend to what has been referred to as “Ethereum season.” Current data reveals a drop in the representation of memecoins within the altcoin market, reminiscent of the situation seen in February 2024.
Why is Memecoin Popularity Dropping?
CryptoQuant’s recent statistics highlight a decline in memecoins’ market share to a mere 0.039. The key driver behind this trend appears to be Ethereum’s ascending dominance. Ethereum appears to be absorbing a considerable portion of market liquidity, leaving less room for investment in memecoins and other altcoins.
Social media discussions reflect this sentiment, with comments such as, “It’s clearly not the season for memecoins; their performance is rather lackluster, with only a few exceptions.”
How Does Ethereum’s Performance Compare?
Since April, while memecoins have seen their total market value rise by approximately 79.5%, Ethereum has outstripped them with a remarkable 215.91% increase. This month, Ethereum continued its upward trend with a 25.41% gain, whereas major memecoins like Dogecoin, Shiba Inu, and Pepe achieved only modest successes.
This variance indicates Ethereum’s siphoning of market liquidity from memecoins. Investors have thereby reinforced Ethereum’s standing against Bitcoin and various altcoins, emphasizing the distinctive phase.
“We are in Ethereum season; most liquidity is flowing to ETH,” Cas Abbé observed.
Will Memecoins Make a Comeback?
Market analysts propose potential renewals in memecoin rallies. The market cycle progresses through four stages, with Ethereum presently leading in the second stage. Merlijn The Trader articulated this phase’s significance:
“We’ve waited years for this moment, and now we’re here. ETH just entered the 2nd stage of Ethereum season. The best rallies in the past started here.”
During the cycle’s third stage, Ethereum continues to excel over Bitcoin, fostering growth in large-cap altcoins. Ultimately, the final stage ignites enthusiasm across all altcoin categories, even memecoins, with faster upticks noted in smaller altcoins. An analyst pointed out that “Altcoins have started to rise, and memecoins always rise at the end.”
Ethereum’s increasing dominance has detrimentally affected the market share of memecoins. Yet, future cycles may shine a spotlight on memecoins again, contingent on the prevailing market conditions and how investments are allocated.
