coindesk.com
Top meme coins like DOGE, SHIB, WIF, PEPE and others have taken a bigger hit than bitcoin in the past seven days.
Still, the market for meme coins appears more liquid than early this year, a sign meme coins are more than a passing trend.
The meme coin frenzy may have slightly subsided with bitcoin (BTC), the industry leader, losing upside momentum. Still, markets for top meme coins remain more liquid than early this year, a sign that the supposedly nonserious cryptocurrencies, which are often criticized for lacking utility, are here to stay.
Over the past week, top meme coins like DOGE, SHIB, WIF, PEPE, FLOKI, and BONK have dropped in value, ranging from 19% to 27%, registering bigger losses than bitcoin, CoinDesk data show. The leading cryptocurrency by market value has declined 6% as escalating geopolitical tensions in the Middle East have spurred an outflow of money from risk assets and into safe havens like gold.
The price pullbacks have led to a decline in trading volumes. According to data tracked by institutional crypto exchange FalconX, the average daily trading volume in the leading meme coins has cooled to $3 billion from $5.8 billion in March. However, it remains significantly higher than $500 million daily in January.
More importantly, the 1% market depth, a measure of liquidity to gauge how easy it is to execute large orders at stable prices, remains resilient.
Per FalconX, the 1% market depth for DOGE, the world’s biggest meme coin by market value, was $10 million on Friday, the highest in at least a year. Meanwhile, the market depth for the second largest meme token, SHIB, was $4 million.
In other words, buy/sell orders worth $10 million and $4 million are needed to move the price of DOGE and SHIB, respectively, by 1%. The 1% market depth represents a collection of buy and sell offers within 1% of the mid-price or the average of the bid and ask prices.
“These levels are very respectable for alts [altcoins] liquidity. For reference, SOL has a market depth of roughly $20 million. 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,” FalconX said in the weekly newsletter.
“All in, if the price and volume trends show a tired market in the short term, market depth is showing that meme coins could have more staying power than some expect,” FalconX added.