Which Sector is on the Rise as Memecoins Lose Momentum in Crypto?
With rapid changes in fund flows within the cryptocurrency market, a notable loss of momentum in memecoins has emerged in recent days. The GMCI memecoin index, which tracks prominent memecoins by market capitalization, has displayed a stagnant trend since reaching 523.5 points on November 15, hovering around the 500-point mark.
Analysts believe that the memecoin market is experiencing a fatigue phase following a series of price increases driven by exchange listings. Min Jung, an analyst at Presto Research, stated that discussions surrounding platforms like Pump.fun within the Solana ecosystem have contributed to the decline. The platform had to disable its live streaming feature following reports of harmful behavior.
On the other hand, the GMDEFI index, which measures the performance of leading DeFi assets, has recorded a 35% increase since November 14, rising from 82.47 to 111.43. Arthur Cheong, founder and CEO of Defiance Capital, noted that investor interest has shifted back to fundamentals-based projects, with this capital movement directed towards DeFi platforms such as Ethereum, AAVE, ENA, and ENS. There are heightened expectations that the market perception of DeFi will evolve positively with Donald Trump’s potential reelection, anticipating that pro-crypto policies could favor decentralized finance.
DeFi is gaining momentum again. While Bitcoin has continued to move sideways recently, Ethereum has seen an almost 10% increase over the past week, stepping into the $3,600 region. Solana, however, has pulled back from its peak level of $263 by more than 5%, falling to $245. Despite these slight pullbacks, the cryptocurrency market maintains its momentum due to strong market sentiment, institutional inflows, and the expanding decentralized finance (DeFi) sector.
The DeFi sector has experienced significant growth, reaching a total value locked (TVL) of $119.76 billion. Ethereum remains the leader in this space with $35.396 billion in TVL across platforms like Lido, which focuses on liquid staking. Major DeFi platforms such as Aave and EigenLayer are seeing increased interest as investors search for higher returns through lending and staking mechanisms. Particularly, EigenLayer has attracted attention with a 7.41% daily and a 13.13% weekly increase in TVL, indicating strong adoption of restaking solutions.
Overall, the current momentum in the cryptocurrency market is significantly influenced by macroeconomic stability, institutional transactions, and DeFi. With Bitcoin leading the way, the Ethereum and Solana ecosystems remain robust, positioning the market well for further growth unless unexpected macro or regulatory changes occur. However, the market sentiment, which has reached an excessive risk appetite level, necessitates caution in the short term. In the long run, the expansion of decentralized finance and increased institutional adoption present a positive outlook.