Memecoins
Solana climbs 4% on the back of rising Meme Coins and Alts
The cryptocurrency market is abuzz with renewed optimism as Bitcoin (BTC) broke through the $68,000 barrier on Sunday evening, hitting a high of $68,486.
The increase comes as outgoing President Joe Biden announced his decision to withdraw from re-election, which he announced in a letter shared on Twitter.
For analysts, the announcement is a step towards some policy clarity and boosts investor confidence in the market. But the real story lies in altcoins, which are by definition the leading digital assets after Bitcoin.
Here, Solana (SOL) has emerged as the favorite, with a healthy price increase of 4.2%. At the time of writing, SOL is trading at $179.61 according to data from Coingecko. This is thanks, at least in part, to Political Coins There has been a surge of interest from traders after Biden dropped out of the race over the weekend.
This positive momentum seems to have spread to other altcoins and memes. Solana’s meme coin, Dogwifhat (WIF), has seen a 10% surge. At the time of writing, WIF is trading at $2.80 after gaining 57% over the past week.
Avalanche (AVAX) joined the party with an impressive 11.3% gain to $32.25 and the ever-popular Dogecoin (DOGE) climbed 5.2% to $0.1379.
The total market capitalization of altcoins has now reached $1.34 trillion, according to Coingecko.
But crypto analyst Benjamin Cowen drew parallels between current market conditions and past cycles, noting that there is a chance this altcoin boom could be short-lived.
“The monthly BTC dominance candle reminds me of May 2019, 2 months before the Fed cut rates in the last cycle,” wrote the CEO of Into the Cryptoverse on Twitter. “BTC also had an explosive move back then, and ALTs just couldn’t keep up. Similar candle today, potentially 2 months before the first rate cut.”
This sentiment is also supported by data from Finery Markets, which reported a significant 51% year-over-year increase in total crypto-to-crypto trading volume during the first half of the year.
While Bitcoin and Ethereum (ETH) continue to dominate, several altcoins have shown remarkable growth. Litecoin (LTC) saw an 80% year-over-year increase, Tron (TRX) surged 202%, and Binance Coin (BNB) increased 129%.
Interestingly, a research note from Finery Markets attributes much of this growth to a low base effect resulting from the market slowdown in the first half of 2023, triggered by the collapse of FTX.
This suggests that the current surge in altcoins, led by Solana, could be part of a broader process of market recovery and maturation.
It should be noted, however, that institutional participation in altcoins remains relatively low, with the top five alternative cryptocurrencies accounting for just 5.4% of total trading volume.
This indicates that there could still be significant room for growth as institutional investors become more comfortable with these assets.
Mads Eberhardt, senior cryptocurrency analyst at Steno Research, offers an optimistic outlook for the cryptocurrency industry in the second half of the year. said On Twitter, there has been a massive surge in USD liquidity, thanks to what appears to be the first interest rate cut by the US Fed and the fact that Bitcoin and Ethereum both have spot ETFs in the US, with Bitcoin ETFs seeing record launches earlier this year.
Eberhardt also highlighted other positive factors, including “a clear regulatory framework with the European Union’s MiCA, steadily declining exchange balances, strong seasonal trends, a post-4th Bitcoin Halving period, a period where Bitcoin has historically thrived.”
He also noted that “every major bank will experiment with real-world assets on-chain” and “in November, the first-ever pro-cryptocurrency US president will likely be elected.”
Based on these factors, Eberhardt issued a bullish forecast for “Bitcoin at $100,000. Ethereum at $6,500.”
Edited by Stacy Elliott.