Memecoins fall to their lowest level in 18 months
The crypto market is going through a major redistribution phase. While Ethereum attracts the majority of capital and focuses investors’ attention, memecoins are losing ground, seeing their dominance crumble. Dogecoin, Shiba Inu, and Pepe struggle to keep pace. Should this be seen as an end of cycle or just a lull before a new explosive rally?
In brief
- Memecoins dominance reaches its lowest level since February 2024, falling to 0.039.
- Ethereum massively captures market liquidity, overshadowing meme crypto performances.
- Experts identify a four-phase cycle, with an explosive ‘altseason’ to come that could revive memecoins.
- Experts identify a 4-phase cycle, the ‘altcoin season’ could revive memecoins.
Ethereum’s hegemony disrupts the crypto ecosystem
The dominance of memecoins in the altcoins market is dangerously eroding. According to CryptoQuant , this critical indicator has dropped to 0.039. A level not seen since February 2024, 18 months earlier.
This plunge is mainly due to the massive liquidity suction by Ethereum. The world’s second biggest crypto monopolizes investors’ attention and drains capital towards its ecosystem.
“It’s clearly not meme season right now,” analysts summarize on social networks. And the figures back them up. Since early August, Ethereum has gained +25.41%, while the main memecoins struggle to show double-digit performances.
This “Ethereum season” coincides with the massive arrival of institutional capital. BlackRock injected 640 million dollars in one day into its Ethereum ETF . BitMine Immersion added 300,000 ETH to its reserves in one week. These titanic flows create a suction effect that deprives memecoins of the liquidity needed to take off.
A predictable cycle towards memecoins explosion?
Despite this dark picture , memecoins’ story could see a new twist. Crypto experts have identified a recurring four-phase cycle governing sector rotations. Currently in phase 2, the market sees Ethereum dominate bitcoin and other altcoins.
“We have been waiting for this moment for years. Now it is here. ETH just entered phase 2: Ethereum season.” explains Merlijn The Trader.
This phase will be followed by a third step where large-cap altcoins will start their ascent, before the ultimate phase: the altseason.
This fourth phase represents the Holy Grail of crypto investors. It is characterized by widespread euphoria successively affecting large-cap altcoins, then medium and small caps.
Memecoins, traditionally the last to take off, then benefit from an explosion of volumes and prices.
Technical analysis supports this cyclical vision. The comparative performances of August perfectly illustrate this hierarchy: Ethereum shows +25.41%, while Dogecoin manages only +10.48%, Shiba Inu +4.58%, and Pepe +7.31%. A gap that could abruptly reverse in the final phase of the cycle.
The fall in memecoins dominance marks less an end than a strategic transition. This rotation towards Ethereum could be the prelude to a historic altseason. It remains to be seen whether the increasing institutionalization of the crypto market will permanently change these traditional cycles or simply delay their timing.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Musk on chip production: China's large-scale manufacturing capacity often exceeds the sum of all other regions worldwide
After ChangXin Memory Technologies announced a key breakthrough in DDR5 server memory, the Philadelphia Semiconductor Index in the US stock market fell 2.7% overnight, with shares such as Micron and SK Hynix ADR dropping collectively. Musk commented on this trend, saying that when China figures out the manufacturing method of a product, its ability to scale production often exceeds that of the rest of the world combined, and stated that "China seems to be rapidly conquering" general standard specifications such as LP5 and LP6.
IREN reports $702.6 million net loss despite $4 billion in AI cloud contracts
The current AI frenzy: featuring both "Tech and Internet" and "Real Estate" bubble characteristics, reminiscent of the 2008 global capital cycle
This wave of the AI boom exhibits dual characteristics: On a micro level, the heavy-asset nature of AI data centers is driving the industry toward "real estate-like" debt financing models, such as corporate bonds, private credit, and computing power ABS. On a macro level, nearly $2 trillion in overseas excess savings is flowing into core AI assets in the U.S. stock market through private institutions, reconstructing a transnational capital cycle reminiscent of the period before the 2008 subprime mortgage crisis. With nearly $3 trillion in off-balance sheet debt and rising interest rates, the industry is facing an impending major liquidity test.
AI Trading Faces a "Vulnerable Moment"! Japan and South Korea Stock Markets Experience "Black Tuesday" as SK Hynix, Samsung, and SoftBank Plunge Together
On Tuesday, Asian tech stocks faced a new round of systemic sell-off as the overnight weakness in the US semiconductor sector spread to the Asia-Pacific market. Concerns intensified over increasingly fierce competition due to the technological breakthrough by Chinese memory chip manufacturer ChangXin Memory Technologies, as well as worries about the returns on AI capital expenditure and the overall financing environment.
Crypto prices
More
