The Memecoin Market Might Be Collapsing, Santiment Warns

Memecoin has recently suffered heavy losses, and what seemed like a panic sell-off could be much more likely to reverse than many traders predicted.
Santiment states that this sector is showing a classic surrender signal: widespread speculation that meme tokens are “dead” can sometimes mark the moment when buyers quietly return.
According to Santiment, “collective acceptance of ‘the end of the meme era’ is a classic surrender signal,” pointing out that when a market sector is considered worthless, it is often a “counter-trend” moment to watch.
Sentiment on social media channels is heavily tilted toward fear, and when the crowd abandons an entire sector, prices can move in the opposite direction for a period. Some early retreating traders are now closely monitoring the situation.

Surrender could signal a turning point.
Reports show that recent memecoin market declines are very significant in absolute numbers. According to CoinMarketCap data, the total memecoin market cap has fallen 34% to $31 billion over the past 30 days.
Bitcoin’s decline — reaching nearly $60,000 on February 3, the lowest since October 2024 — has added broad pressure and made speculative tokens more vulnerable.
Positioning in stocks focused on a few select tickers, and when large investors take profits, these fluctuations are amplified.
Losses are not limited to small projects; some well-known meme tokens have also lost significant positions.

Rebalancing may not lift all boats.
Some market observers believe the old pattern — Bitcoin rising first, then money flowing into Ethereum, followed by riskier altcoins — may not play out the same way this time.
As institutions develop and trading strategies change, capital flows may become more selective. This means some tokens could surge while many others are left behind.
Reports from traders and analysts suggest the most likely scenario is selective growth rather than broad-based expansion. This raises expectations for anyone hoping to find the next big winner among the many speculative cryptocurrencies.
Popular meme tokens are under pressure.
A few standout tokens have led the decline. Dogecoin (DOGE) has lost support levels it previously held, and PEPE has shown more volatility as large investors cut their positions.

Official Trump (TRUMP), a token linked to U.S. President Donald Trump’s politics, has fallen sharply from its peak after the initial hype subsided.
The large concentration of supply in a few wallets has made these projects vulnerable to rapid swings, and some gains made last year have been wiped out in a short period.
Watch the crowd’s turning point.
Contrarian traders will point out that acknowledging failure on social media could be a potential signal to start watching for a bottom.
That approach is very risky. Losses can grow larger before the market hits bottom, and sellers may return during any short-term rebound.
However, history shows that extreme pessimism can signal significant recoveries, especially when overall market pressure eases and liquidity returns.