Meme tokens are increasingly perceived as a means to speculate on blockchain growth, particularly due to their accessibility and appeal to new investors.
In the past 24 hours, Pepecoin (PEPE), featuring a frog-themed design, witnessed a remarkable surge of up to 60%, extending its weekly gains to over 370%. The token’s trading volumes soared to a peak of $3.6 billion, outpacing other meme tokens like Shiba Inu, Floki, and Dogecoin, even as these tokens introduced ecosystem upgrades.
The robust performance of Pepecoin surpassed that of meme tokens such as Shiba Inu (SHIB) and Dogecoin (DOGE), despite the introduction of upgrades by their developers. Over the past week, DOGE gained 170%, while SHIB gained 200%.
The meme coin rally gained momentum in late February, coinciding with notable surges in bitcoin, ether, and Solana’s SOL. Meme coins, characterized by their lighthearted nature, are viewed as an avenue for betting on blockchain growth, attracting retail investors due to their perceived simplicity.
Pepecoin’s futures products experienced significant liquidations since Friday, exceeding $50 million, suggesting short covering – traders exiting bearish positions on the coin’s price – may have amplified the extent of its gain. This surge in meme coins is seen as a response to investors seeking quick returns while more established tokens take a breather from recent price surges.
Nick Ruck, COO of ContentFi Labs, noted that traders and investors are driving the meme coin trend to fulfill a desire for rapid returns, especially as blue-chip tokens and coins experience a temporary pause in their price uptrend.
However, despite the bullish momentum, funding rates in perpetual futures linked to PEPE futures remain negative, indicating the prevalence of bearish positions in the derivatives market. A negative funding rate suggests that those holding short positions are willing to pay longs to maintain their bearish bets. This dynamic underscores the complex interplay of sentiment and market dynamics within the meme coin space.
