Memecoin sell-off deepens amid broader crypto weakness

The memecoin segment has taken a sharp hit over the past month, shedding more than a third of its total market value as the wider crypto market moved lower. Data shows the combined market capitalization of memecoins has dropped around 34 percent in the last 30 days, reflecting risk-off sentiment across digital assets.
Despite the ongoing pressure, on-chain analytics firm Santiment believes the downturn may be approaching a turning point rather than a prolonged collapse.

Santiment flags classic capitulation behavior

According to Santiment, current market psychology around memecoins resembles a classic capitulation phase. In a report released on Friday, the firm noted a growing sense of nostalgia and resignation among traders, with many treating memecoins as if their best days are permanently behind them.
Santiment argues that this widespread belief in the end of the meme-driven cycle is often seen near market bottoms. When an entire sector is written off, contrarian signals begin to emerge. The firm emphasized that maximum pessimism has historically coincided with moments when patient traders start paying attention again.

Market data shows steep decline but isolated standouts

The slump in memecoins has unfolded alongside a broader market pullback that dragged Bitcoin close to the 60,000 level earlier this month, its weakest price since October 2024. Market figures compiled by CoinMarketCap show total memecoin capitalization sitting near 31 billion dollars, down sharply from January levels.
Performance among individual tokens has been uneven. Most memecoins posted marginal gains or flat returns over the past week. One exception was Pippin, which surged more than 240 percent, standing out in an otherwise subdued field.
Other large names barely moved. Official Trump recorded gains of just over 1 percent, while Shiba Inu rose by a similar margin, highlighting the lack of broad momentum across the category.

Shifting rotation patterns raise questions

In previous market cycles, traders often relied on a familiar capital rotation pattern. Bitcoin typically led rallies, followed by Ethereum, before capital flowed into higher-risk altcoins and memecoins.
This time, that script is being questioned. With Bitcoin increasingly viewed as a maturing asset and institutional participation continuing to grow, some analysts doubt whether capital will rotate into speculative corners of the market as aggressively as before. The memecoin downturn is adding weight to that debate, even as sentiment signals suggest the sell-off may be overextended.

Altcoin season may reward select tokens only

Not everyone expects a broad-based rebound across altcoins and memecoins. Some market watchers believe the next phase of the cycle will be more selective, favoring projects with strong narratives or active communities rather than lifting the entire market.
In comments made last year, Craig Cobb, founder of The Grow Me, said the next altcoin season is unlikely to resemble past rallies where nearly every token benefited. Instead, only a limited number of cryptocurrencies may see sustained upside.

Social sentiment turns sharply bearish

Santiment also highlighted a noticeable shift in social media discussions. Bearish comments now significantly outweigh bullish ones, reflecting widespread fear and fatigue among traders. Historically, such imbalances in sentiment have often appeared near market inflection points.
The firm noted that markets tend to move against prevailing expectations. Persistent disbelief, even during early price recoveries, has previously supported longer-term rebounds. While volatility remains high, Santiment views the current mood as a potential foundation for recovery rather than a confirmation of long-term decline.