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Meme Coin Trading Volume Surges to Two-Year High, Signals Caution for Bitcoin Bulls
Speculative mania in meme coins has historically presaged bearish reversals in bitcoin.
Updated May 8, 2023, 10:13 a.m. Published May 8, 2023, 10:13 a.m.
Trading volume in meme coins, or cryptocurrencies originating from internet memes and having no inherent utility, surged last week in a move reminiscent of frenzied activity observed ahead of previous bitcoin (BTC) market tops.
The crypto market saw $2.3 billion in meme coin trading volume last week – a six-fold rise from the preceding week's $387 million to the highest since May 2021, according to blockchain observer James Tolan's Dune analytics-based tracker.
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The speculative mania was led by pepecoin (PEPE), a frog-themed token launched in mid-April with a maximum supply of 420 trillion. PEPE crossed $1 billion in market capitalization on Friday, eventually peaking at $1.82 billion, a staggering achievement for a three-week-old meme cryptocurrency. At press time, PEPE's market cap stood at $931 million, per Coingecko.
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The PEPE frenzy also spurred speculation in other low-cap tokens like DINO, WSB, CHAD and 4TOKEN, which rose by several hundred percent in the past two weeks.
Historically, speculative mania in non-serious cryptocurrencies has presaged major market tops or bearish reversals in bitcoin, the leading cryptocurrency by market value.
Bitcoin traded near $27,970 at press time, representing a 2% drop on the day, despite the weakness in the dollar index (DXY). Bitcoin usually moves in the opposite direction of the dollar index, which gauges the greenback's exchange rate against major currencies, including the euro.
The DXY saw a brief bounce to 101.75 on Friday following the release of surprisingly strong U.S. jobs data, but since then has fallen back to under 101.20.
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Solana CME Futures Fell Short of BTC and ETH Debuts, but There's a Catch
When adjusted for asset market capitalization SOL's relative futures volume looks better, K33 Research noted.
Cosa sapere:
- Solana's SOL futures began trading on the Chicago Mercantile Exchange (CME) on Monday, with a notional daily volume of $12.3 million and $7.8 million in open interest, significantly lower than the debuts of bitcoin (BTC) and ether (ETH) futures.
- Despite the seemingly lackluster debut, when adjusted to market value, SOL's first-day figures are more in line with BTC's and ETH's, according to K33 Research.
- Despite the bearish market conditions, the launch of CME SOL futures offers new ways for institutions to manage their exposure to the token, said Joshua Lim of FalconX.
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