The market capitalization of memecoins has undergone significant losses in the last 24 hours, with tokens on Solana and layer-2 network Base registering a 12% and 19% drop in the same time frame. The memecoin drop is happening around the same time that Bitcoin also experienced a drop of 4.94% to trade at $66,032, per data from CoinMarketCap.
Memecoins market cap experiences a wild decline
Crypto analysts have given their opinions on the current market situation. While some noted that it is a natural occurrence for memecoins to mirror the price movement of Bitcoin, others clarified that the tokens are simply undergoing their natural progression. Analyst and founder of Quantum Economics Mati Greenspan noted that it looks like the tokens stopped being funny.
Greenspan mentioned that it was ironic that the assets started witnessing a bearish return on April Fool’s Day. He noted that most of the coins have a lot of value and their upward song would have ended at some point. According to data from CoinGecko, the market cap of Solana memecoins is about $8 billion, seeing a drop of 12% in the last 24 hours.
The leading memecoin on Solana Dogwifhat experienced a 9% drop in one day, translating into a loss of $3.9 billion. However, the drop did not shake the token as it accounts for nearly half of the total memecoin share on Solana. Dogwifhat presently holds a total of $484 million in open interest among eight exchanges. The token has also seen over $2.7 million worth of leveraged positions liquidated in the last 24 hours.
Correlation between Bitcoin and memecoins price movement
The total market cap on Base network dropped 19% to $1.4 billion, witnessing a drop of 19% in the 24 hours. High-flying token DEGEN experienced the biggest damage, seeing a drop of over 26% to push its market cap to $436 million. Per data on CoinMarketCap, the entire crypto market cap also dropped by 6%, standing at $2.45 trillion.
Greenspan clarified that while Bitcoin is being aided by strong support levels, the volatility of memecoins is beyond critical price levels. He noted that retracement in Bitcoin’s price is small compared to what memecoins are going through. In context, Bitcoin experienced a 4.94% drop compared to WIF’s price which saw a 10% decline.
In his opinion, Greenspan explained that this correlation shows the power that Bitcoin exerts over other cryptocurrencies in the crypto market. He clarified that the directional correlation that they share shows when Bitcoin goes up or down. The analyst noted that the assets tend to overdo when they mirror the price of Bitcoin.
