According to analysts, memecoin traders seemed to be making profits on Monday after a robust begin to the yr, with memecoin trading volumes surging while memecoin market capitalization fell.
According to crypto data platform CoinMarketCap, memecoin trading volume rose to $5.62 billion on Monday, up 106% from the day past, while memecoin market capitalization fell 6%.
Since then, volume has fallen back to $3.6 billion, a every day lack of greater than 24%.
Vincent Liu, the chief investment officer at Kronos Research, told Cointelegraph that a rise in memecoin trading volume amid declining market capitalization indicates heavy churn, somewhat than fresh capital entering the market, and typically reflects profit-taking, short-term rebalancing, and capital rotation.
Memecoin trading volume rose to $5.62 billion on Monday, up 106% from the day past. Source: CoinMarketCap
“When liquidity is low, increased activity can still drive prices down whilst volume increases,” he said. “The initial rise and subsequent volume decline suggests that speculative momentum has cooled.”
“Once profit-taking, liquidations and rotation trades are absorbed, momentum traders retreat, spreads widen and participation decreases. Volume often briefly increases around catalysts before quickly normalizing.”
The yr began with a bang for memecoins
Memecoins enjoyed a robust begin to the yr as their market capitalization rose from $38 billion on December twenty ninth to $47.7 billion on January fifth before cooling off in the next days.
Kadan Stadelmann, the chief technology officer of the blockchain-based Komodo platform, told Cointelegraph that gains on this sector are often the results of speculation and are likely candidates for a reversal somewhat than remaining stable.
“The overall fundamentals of the memecoin market are poor and driven by speculation. This leads to constant capital rotations between memecoins, leading to price declines for certain coins and price increases for others,” he said.
According to a report by CoinGecko research analyst Shaun Paul Lee, crypto market turmoil over the past yr has decimated memecoins specifically and pushed the variety of failed crypto projects to over 11.6 million in 2025, the best level in a single yr.
Memecoins can be depending on Bitcoin in 2026
According to market research platform Santiment, there has also been a recent increase in discussions about memecoins on social media.
Discussions have largely focused on frustration over repeated withdrawals, whilst traders proceed to be drawn to the tokens for quick profits, Santiment said.
On Monday there have been heated discussions about memecoins on social media. Source: Santiment
Memecoins are among the many riskiest bets in crypto, and their success or failure is usually a temperature test of how much risk investors are willing to take.
Stadelmann predicts that Bitcoin (BTC) will play an enormous role within the memecoin sector this yr and its performance will help or hinder the market.
“The market performance of memecoins in 2026 will, as usual, rely on Bitcoin, which underperformed gold in 2025. The same could occur in 2026, which can be negative for memecoins,” he said.
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