The memecoin sector is facing one of the most difficult moments in its recent history. If the start of last week was negative, this week's beginning could be described as catastrophic.
The adverse reaction of the markets, provoked by the trade war driven by U.S. President Donald Trump, generated a strong backlash in investor sentiment toward risk assets, with memecoins being the most affected.
This segment, which was already showing signs of weakness in the previous weeks, experienced a significant collapse in recent hours. The total market capitalization of these assets plummeted dramatically from $69 billion to $59 billion in a matter of hours.
Although at the time of this writing the capitalization has slightly recovered to $69 billion, the decline in the last 24 hours reaches an alarming 17.3%, while the weekly loss stands at 22%.
In the top 20 memecoins by market capitalization, all recorded double-digit losses, except FARTCOIN (#11), which surprisingly showed a growth of 5.8% in the last 24 hours.
Among the leading cryptocurrencies in this segment, Dogecoin leads the losses, falling to $0.25 per token. A similar negative trend was observed in Shiba Inu and PEPE, which suffered declines of 17% and 20%, respectively, in just 24 hours. These figures reflect a clear fear among investors in light of the uncertain global outlook.
Are there chances of recovery?
The uncertainty dominating the markets particularly affects the memecoin sector. For a long time, this market comfortably held a capitalization above $100 billion. In fact, Dogecoin reached prices close to $0.40 per token, but times have changed.
Although a recovery seems inevitable at some point, it is unlikely to occur in the short term due to the high risk aversion prevailing in financial markets. Both cryptocurrencies and stocks are facing relentless pressure from the fragility of the global economy.
For example, Asian and European markets closed in the red at the beginning of the week, with losses ranging from 1.22% to 1.91%, according to Bloomberg.
This slowdown is also negatively impacting U.S. stocks, particularly in sectors like automobiles, reflecting widespread stress in global supply chains.
Everything indicates that this hostile environment will continue to significantly impact higher-risk assets, including memecoins. Therefore, it is unlikely that their prices will experience sustained increases in the short term. On the contrary, bearish trends could intensify before a new equilibrium is reached in this volatile market.
