Memecoins Tank As The Overall Crypto Market Extends Its Slide

In the past 24 hours, the overall crypto market has slipped further into red territory, shedding 1.14%.

The crypto market has slipped further into red territory in the past 24 hours, with a 1.14% decrease. Major token categories have seen a 6.10% loss during this period, bringing the total market cap to $66.10 billion.

The trading volume in this category has also steadily declined, decreasing by 27.23% to reach $8.43 billion.

Top 10 losers dominated by memecoins

In times of widespread market stress, riskier assets usually get hit hardest. And in this case, memecoins are bearing the brunt.

According to CoinMarketCap’s top gainers and losers list, the majority of the market’s biggest losers over the past 24 hours are memecoins.

Five out of the ten top underperformers are memecoins: Bonk [BONK], Floki [FLOKI], Pudgy Penguins [PENGU], Fartcoin [FARTCOIN], and Brett (Based) [BRETT], which have decreased by 12.28%, 10.20%, 9.95%, 9.16%, and 9.10%, respectively.

In situations like this, it implies that market investors are more bearish than ever, prompting widespread selloffs.

This is reflected in the decline in Market Volume, according to an analysis of the Market Capitalization.

Over the past 24 hours, the Market Cap dropped to a new weekly low of $65.53 billion, but later saw a slight recovery to $66.10 billion.

While price dips tend to attract dip-buyers, that hasn’t been the case here.

That’s because trading volume cratered 27.23% alongside price, signaling not just panic, but hesitation. It suggests sellers are exhausted, but buyers aren’t stepping up either.

AMBCrypto did further digging and found that memecoin prices could fall even lower.

From high performer to low performer

Several factors drove memecoin losses over the past 24 hours, including a drop in the Altcoin Season Index.

Traders use the Altcoin Season Index to gauge the likelihood of a market rally among crypto assets, excluding Bitcoin.

When the index reads high, it signals that altcoins are more likely to rally, as more liquidity enters the market. A lower reading suggests a liquidity outflow.

This index has dropped from a high of 43 to its current level of 22, indicating that confidence is waning, and that selling pressure is increasing.

Lower readings imply capital is flowing out of altcoins and back into stable assets, or simply off the table. Having said that, it’s not just about sentiment; sector rotation is also in play.

Sector Performance confirms this sentiment

The Sector Performance data tracks how a specific market category has performed over a period of time.

Interestingly, AMBCrypto found that although memecoins led the market last month with a growth rate of 46.8%—making it the sixth highest-performing sector—that trend has reversed.

As per press time, the memecoin sector ranks as one of the most underperforming, with a 2.3% decline in market value.

If this selling trend continues, memecoin prices will likely remain low, with more investors taking on losses.