Memecoins often result in significant losses, but continue to attract retail investors due to their high return potential. It's still early to make solid predictions about a new memecoin season. However, the market has shown several signs that suggest a possible return.
What are these signs? The following sections provide a detailed analysis.
3 signs suggesting that memecoins may return in December
Today (3), CoinGecko reported a 9.4% increase in the market capitalization of memecoins, reaching $48.3 billion. Is this just a temporary rally or the start of a longer bull run? These three signs suggest the answer.
1. Strong recent performance of the memecoin sector
The first signal comes from the strong performance of memecoins in recent days.
With the market recovery in early December, Bitcoin rose back to over 90 thousand dollars. The market capitalization of altcoins also showed a V-shaped recovery. During the same period, the memecoin sector delivered more significant gains.
Data from CoinGecko shows that, in the last seven days, Solana Meme, Pump.fun Ecosystem, and frog-themed memecoins were among the seven best-performing categories in the market. Notably, the memecoin group from the Pump.fun ecosystem ranked second, with an average gain of over 12%.
Some memecoins started to rise before the broader altcoin market. Coins like TURBO, FARTCOIN, PIPPIN, and SPX began to move at the end of November.
Overall, the Solana ecosystem remains the primary focus of memecoin investors' attention. Although memecoin trading activity on Solana has sharply declined, a single spark can trigger another explosive rally.
"Memes are not dead, but they are taking a pause," Stalkchain commented.
The reason is that memecoins generally have weaker liquidity than leading altcoins. As a result, they tend to produce larger price fluctuations. This makes them more attractive when the market starts to recover. Today's top gainers list included many memecoins like TURBO, BRETT, PENGU, and USELESS.
2. Memecoin dominance is stabilizing and suggesting a bottom pattern
Data from CryptoQuant shows that the dominance of memecoins—measuring the share of memecoins in the total market capitalization of altcoins—has remained stable for almost two months.
A flat dominance ratio signals a weakening of panic selling pressure, even though prices may still drop.
A similar pattern emerged in the third quarter of 2024. The dominance of memecoins remained stable for three months before entering the strongest memecoin rally in market history.
3. RSI indicators point to a bullish divergence in the market capitalization of memecoins
The third signal originates from a technical analysis perspective, using the daily RSI of the memecoin market capitalization.
The RSI formed a bullish divergence. The market capitalization created a lower low, while the RSI created a higher low.
This pattern shows the weakening of selling pressure. It also carries strong reversal implications, especially as the RSI rose from the oversold level near 30.
Memecoins still move quickly in both directions. They rise quickly but can drop just as fast. Adding memecoins to a portfolio requires careful consideration and strict position sizing to minimize risks.
The article "Is the memecoin season back? 3 signs that December may get hectic" was first seen on BeInCrypto Brazil.
