Based on previous trends, memecoins have outpaced altcoins in attracting capital, signaling a possible post-election cycle.
Memecoin is leading altcoins, signaling a possible “meme-driven” cycle after the election.
However, one key condition must be met to achieve this goal.
Memecoin’s dominance is currently close to 3%, which is the same as it was in mid-March when Bitcoin [BTC] surged to an all-time high of $73,000 and the total market capitalization was approaching $2.7 trillion.
By early April, meme tokens’ market share peaked at 4% as investors reallocated funds into high-market-cap tokens.
With the election approaching, BTC is set to attract a lot of liquidity, sparking speculation about whether memecoin is ready to surge higher. If historical patterns hold, we could see the top of the memecoin cycle in mid-November.
Memecoins outperform altcoins
With 60% of the top 10 memecoins in profit, it’s clear that memecoins are drawing liquidity away from Bitcoin, while altcoins are still struggling to attract similar interest.
Leading the way was Dogecoin, which posted a weekly gain of more than 24%, firmly ranking among the best performers of the past seven days. Generally speaking, such a surge suggests that the current cycle may have peaked as retail investors begin to hedge against volatility.
However, this market cycle is more influenced by macroeconomic factors, especially with the election less than a week away.
The main factor driving Bitcoin's rise to all-time highs was BlackRock's $872 million inflows in a single day, setting a record for the highest single-day inflows. In contrast, the ETH ETF received only $4.4 million in inflows, reflecting a relatively weak investor interest.
This trend confirms AMBCrypto’s previous hypothesis: as in past cycles, during this bullish phase, memecoins outperform altcoins in attracting capital.
However, for the memecoin cycle to fully kick in, Bitcoin may need to reach a market top. Net deposits on exchanges remain high, suggesting increased selling pressure, but the bullish MACD crossover suggests there is further room to rise before any major correction.
As FOMO drives BTC higher, resistance around $75k after the election could come into play. If Bitcoin peaks and then pulls back, capital could flow into memecoins, potentially kicking off a memecoin cycle in mid-November, as AMBCrypto suggests.
So, should you buy on the dip?
As mentioned earlier, most memecoins are experiencing significant gains, with 6 of the 10 coins with the largest gains in the past 30 days being memecoins.
However, for the full cycle to come to fruition, it is critical that enough holders view the current price as a solid buying opportunity to support this theory.
Interestingly, whales, which make up 62% of the DOGE large group, have been actively buying large amounts of DOGE tokens from exchanges over the past month.
This strategy supports the theory of an upcoming memecoin cycle as they take advantage of the altcoin downturn and the expected increase in volatility after Bitcoin reaches its peak.
Therefore, the possibility of a post-election memecoin cycle looks promising. However, while these whales take advantage of the gains, their long-term commitment is crucial. As altcoins lose momentum, memecoins could be primed for a strong rally in the future, if history is any guide.
