Memecoins on Solana and Base Witness Massive Market Cap Drops Amid Bitcoin Downturn
Summary:
Memecoins on Solana and Coinbase's Ethereum layer-2 Base have seen significant market capitalization drops of 12% and 19% respectively in the last 24 hours. This fall coincides with a near 5% decline in the value of Bitcoin, adding support to theories that posit such drops usually occur alongside BTC hits. Some analysts suggest the downturn is due to the humorous appeal of memecoins beginning to wane. Despite this, even as Solana's and Base's total market cap and the value of leading tokens like WIF, DEGEN have taken hits, Bitcoin continues to find robust support levels.
In the last day, there has been a remarkable decrease in the total market capitalizations for memecoins on both Solana and Coinbase's Ethereum layer-2 Base, dipping by 12% and 19% respectively. This downturn coincides with a sharp fall in the value of Bitcoin (BTC), which dropped by almost 5% in the past day, according to data from CoinMarketCap. Some experts believe that such drops in memecoins usually occur when BTC prices take a hit, while others suggest it could be due to the humor surrounding memecoins running its course. Crypto analyst and Quantum Economics founder, Mati Greenspan, stated that it's unsurprising the surge peaked on April Fool's day, adding that it can't continue in perpetuity. As of now, Solana's memecoin market cap stands at $8.29 billion, a 12% decrease in the last day as per CoinGecko. Dogwifhat (WIF) – the number one Solana-based meme token by total value – experienced a 9% reduction in market cap, worth $3.9 billion. However, WIF forms nearly 50% of the total memecoin market share on Solana. It has an open interest (OI) of $484 million across eight significant crypto exchanges but has seen $2.76 million in leveraged positions liquidated in the last day, including $1.89 million in short positions and $872,460 in long positions, as per CoinGlass data. Meanwhile, Base's total market cap shrunk by 19% in 24 hours to $1.47 billion. The market cap of DEGEN, the native token of a new Layer 3 network named “Degen” on Base, suffered the heaviest hit, decreasing by over 26% to $436.5 million. The total crypto market cap, a valuation of all assets across the entire crypto sector, also decreased by 6.14% in the past day, sitting at $2.45 trillion, as per CoinMarketCap data. While Bitcoin finds strong support levels, Greenspan warns that memecoins are experiencing serious price fluctuations. In the past 24 hours, Bitcoin has traded at $65,910, marking a 4.94% decline, while WIF’s price has fallen by 10.3% to $3.67. Greenspan attributes this to Bitcoin's dominant correlation to other cryptocurrencies in the larger crypto market. He states that they tend to dramatically rise when Bitcoin does and drop more significantly when Bitcoin descends. Charles Edwards, founder of Capriole – a quantitative Bitcoin and digital asset fund – agrees with Greenspan and warns that memecoins are likely to experience a more extreme impact when Bitcoin drops. He also mentioned that the recent hype for Solana and Base ecosystems are playing a role in these price movements. Crypto analyst Ran Neuner echoed these sentiments in an April 2 post, stating that the memecoin market is nearing a saturation point.
Published At
4/3/2024 5:50:56 AM
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