The memecoin sector is currently losing market share and liquidity as Ethereum continues to absorb significant capital within the broader altcoin market. After a peak in July 2025, when the memecoin market capitalization neared $80 billion, it has since struggled to maintain momentum, with the total market cap down to around $70.7 billion. Trading volumes and retail participation in memecoins have declined sharply, with platforms specialized in memecoin trading reporting major drops in revenue, daily traders, and trading volume. For example, the Solana memecoin launchpad Pump.fun saw an 80% revenue drop in July from its peak earlier in the year.
Analyst Darkfost highlights that memecoins are underperforming compared to more established altcoins, particularly Ethereum, which has benefited from strong institutional interest and deeper liquidity. The shift of capital towards Ethereum and fundamentally stronger projects means memecoins, which rely heavily on hype cycles and speculative buying, face a challenging environment. Without renewed hype or catalysts, memecoin prices and market share are expected to remain subdued or decline further.
Despite this, a few memecoins still show gains, but these are exceptions rather than the norm. Market participants are advised to exercise caution due to the high volatility and weak fundamentals in the memecoin sector at this time. For a meaningful recovery, memecoin market cap would need to break back above the $75–$76 billion range and hold there. Otherwise, a deeper correction testing levels around $64–$65 billion could occur.
In summary, memecoins currently face a downturn driven by waning retail enthusiasm and a strong preference for Ethereum and other solid altcoins that offer more fundamental value and institutional participation.
