Meme Coins Outperform BTC, ETH and SOL as Traders Rotate Holdings

As a seasoned crypto investor with years of experience in this volatile market, I’ve seen my fair share of trends come and go. But one thing that has always intrigued me is the meme coin sector. I remember back in 2021 when Dogecoin (DOGE) skyrocketed to unimaginable heights, leaving many traditional investors scratching their heads.The meme coin market, valued at over $53 billion, experienced a growth of more than 12% on Tuesday. Notable coins such as Pepe (PEPE) and DogwifhAT (WIF) saw impressive gains of 22% and 25% respectively, according to CoinGecko’s latest data.

After reaching a one-month peak of $65,000, bitcoin (BTC) retreated slightly to $63,000. This pullback comes as traders cash in on their profits from higher market cap assets like BTC and Ethereum (ETH), and shift those gains towards more risky investments, such as meme coins.

Multiple meme tokens inspired by American politics have emerged following last weekend’s shooting incident involving presidential candidate Donald Trump at a rally in Pennsylvania. Notably, the markets for America Coin (USA) and Super Trump (STRUMP) have experienced significant growth, with USA up by 204% and STRUMP up by 43% since the event.

Meme coins tend to thrive when Bitcoin (BTC) and Ethereum (ETH) are stuck in a price range close to their local maxima. Conversely, they underperform during market-wide downturns. For instance, Dogecoin (Dogwifhat) gained over 60% in May while BTC hovered between $66,000 and $69,000.

The current market liquidity of Bitcoin (BTC) on Binance is estimated between 14.8 million and 11.2 million dollars, which is close to its current level with a difference of less than 2%. In contrast, the market depth for WIF is only between 1.4 million and 1 million dollars, suggesting that relatively small market events could significantly impact the price of meme coins like WIF compared to larger tokens such as Bitcoin (BTC) or Ethereum (ETH).