Memecoins saw a strong recovery early in the week – Will they regain dominance in the crypto market?
- Memecoins and AI tokens posted a strong recovery earlier in the week. But memecoins have maintained dominance during the recovery, as PEPE and WIF tops.
After a bloody meltdown in the past few days, the market rebounded on Monday, with memecoins and AI tokens leading the recovery.
Among Tuesday’s top gainers were Dogwifhat [WIF] and Fetch [FET]. They posted double-digit gains as Bitcoin [BTC] reclaimed the $60K level.
Reacting to the recovery, market observer Bluntz Capital noted,
“Memes and AI will continue to be the 2 top leading narratives, in my opinion. Pick your fighters wisely.”
Will memecoins regain dominance?
The recovery extended on Wednesday, and memecoins still dominated the top gainers, according to CoinMarketCap data. Pepe [PEPE] and Brett [BRETT] were up 12% and 18%, respectively, in the past 24 hours.
However, last week, CryptoQuant founder Ki Young Ju established that memecoin’s dominance in the altcoin market had declined. Based on this data point, Ju stated he was “bearish” on memes but long on BTC.
Indeed, the recent market rout decimated the alt market, with memes like WIF dropping by over 48%.
Despite posting 15% and 11% gains on the 24th and the 25 of June and hitting $2, WIF’s market bias was still bearish, especially on the higher timeframe charts.
However, some memes like PEPE had flipped to a bullish bias and could extend recovery.
PEPE was above its short-term trend, 50-day EMA (Exponential Moving Average), and had a daily close above a lower low of $0.000012.
Source: PEPE/USDT, TradingView
To further evaluate Bluntz Capital’s assumption, AMBCrypto analyzed Open Interest (OI) rates, which track liquidity flows into derivative markets.
In the past 24 hours, memes polled second at 7.5% based on Coinglass OI data, indicating more market liquidity flowed into the segment. However, the AI segment came in at position 17.
Across the meme segment, PEPE, Dogecoin [DOGE], and WIF recorded the highest positive OI, indicating the market was excessively bullish on these three in the past 24 hours.
However, another market observer, Alex Kruger, viewed the memecoins as a “joke“ that only benefits insiders.
That said, despite the decline in altcoin dominance, there was still significant traction in the meme segment compared to the rest of the market in the past 24 hours.
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