While the meme coin frenzy has somewhat subdued amid broader market fluctuations, key liquidity metrics indicate that meme tokens such as DOGE and SHIB may have more staying power than previously thought, as per data from institutional crypto exchange FalconX.
Despite recent downturns in market value where top meme coins like DOGE, SHIB, WIF, PEPE, FLOKI, and BONK experienced declines between 19% to 27%, these tokens are showing signs of robustness in the cryptocurrency market. In comparison, Bitcoin, the leading cryptocurrency, saw a relatively milder decline of 6% amid escalating geopolitical tensions that have driven investors towards traditional safe havens like gold.
Interestingly, even as trading volumes have decreased from March's high of $5.8 billion to $3 billion, they still represent a significant increase from January's figures of $500 million. This suggests a sustained interest in meme coins despite price volatility.
One of the critical indicators of this resilience is the 1% market depth, a liquidity measure that assesses the ease of executing large orders without causing significant price shifts. According to FalconX, the market depth for DOGE, which is the largest meme coin by market capitalization, reached $10 million last Friday—the highest in at least a year. For SHIB, the second largest meme token, the market depth stood at $4 million.
This liquidity level implies that it would take buy or sell orders worth $10 million and $4 million respectively to shift the prices of DOGE and SHIB by 1%. These figures are notable when compared to other altcoins; for example, Solana (SOL) has a market depth of around $20 million, highlighting the comparative liquidity and potential long-term viability of meme coins.
FalconX highlighted in its weekly newsletter that such increases in volumes coupled with robust market depth are often indicators of assets believed to have long-term relevance in the market. The exchange commented, "These levels are very respectable for altcoins liquidity... such increases in volumes coupled with market depth are not that common and have traditionally happened to assets believed to have staying power, such as SOL recently."
The current data suggests that while the market may appear tired in the short term, the underlying liquidity and trading activity indicate that meme coins might continue to be a significant part of the crypto landscape longer than some might expect.
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