In the cryptocurrency market, the share of memecoins in total value has fallen to its lowest level in the past year and a half. This decline is related to the current market cycle, which some analysts refer to as the "Ethereum season." Data shows that memecoins' presence in the altcoin market has dropped to its lowest level since February 2024.

Reasons for the decline in market dominance

The latest data from CryptoQuant shows that the share of memecoins in the altcoin market has dropped to 0.039. Analysts believe a fundamental reason for this decline is the increasing dominance of Ethereum. They think Ethereum is currently capturing a significant portion of liquidity.

This shift has led to a decrease in the investment share of memecoins and many altcoins. A social media post pointed out: "Clearly, this is not a golden age for memecoins; very few memecoins are performing well, and those are just exceptions."

Investors' preference for Ethereum has enhanced its position relative to Bitcoin and other altcoins. Some observers emphasize that this period is unique to Ethereum, and the typical altcoin season has not yet arrived. Cas Abbé shared his view: "We are in Ethereum season; most liquidity is flowing into ETH. A real altcoin season requires more liquidity from retail investors, which will only happen once ETH reaches new peaks."

Performance comparison and cyclical expectations

Since April, the total market capitalization of memecoins has grown by about 79.5%. However, this growth rate lags behind Ethereum's surge of 215.91% during the same period. In August, Ethereum rose by approximately 25.41%, while leading memecoins like Dogecoin, Shiba Inu, and Pepe had limited gains.

This divergence is interpreted as Ethereum attracting market liquidity, thereby reducing the market share of memecoins.

Could a new Memecoin season be on the way?

Experts predict that memecoins may experience a new surge in the future. The market typically follows a four-phase cycle, and we are currently in the second phase dominated by Ethereum. Trader Merlijn commented on the current market situation: "We have been waiting for this moment for many years, and it has finally arrived. ETH has just entered the second phase of the Ethereum cycle. The best previous surges often started here."

In the third phase, Ethereum continues to outperform Bitcoin, and major altcoins are showing strong momentum. In the final phase, market enthusiasm sweeps across all altcoins, including memecoins, while small-cap altcoins rise rapidly. As another analyst stated: "Altcoins have begun to rise, and memecoins will eventually rise too."

In summary, Ethereum's market dominance has led to the decline of memecoins. However, in the upcoming cycle phase, memecoins may regain widespread attention. When this occurs depends on market conditions and investment distribution.