Memecoins briefly surge before massive profit-taking

The trading volume of memecoins exploded to over 5 billion dollars in a single day, before falling as quickly as it had risen. Behind this spectacular volatility lies a reality well known to analysts: short-term speculation rules supreme. But this time, is it a sign of a lasting slowdown?

Memecoins rise then investors cash out

On Monday, January 20, the trading volume of memecoins reached 5.62 billion dollars according to CoinMarketCap, a 106% increase in a single day. Yet, at the same time, the sector’s market capitalization declined by 6%. An apparent paradox, but very revealing.

Vincent Liu, Chief Investment Officer at Kronos Research, is categorical: this movement does not reflect any inflow of fresh capital. Behind these figures are essentially profit-taking, rapid asset rotations, and short-term resales.

“In a low liquidity environment, intense activity can still drive prices down, even with a strong increase in volumes“, he explains.

In other words: much noise, little substance. Momentum traders took advantage of a good start to the year, the memecoins’ market capitalization went from 38 to 47.7 billion dollars between December 29 and January 5, to close their positions.

Once these sales were absorbed, volumes normalized as quickly as they had exploded, falling back to 3.6 billion dollars the next day, a decrease of more than 24%.

Liu perfectly summarizes the mechanism: “Volume often experiences brief spikes around catalysts before quickly normalizing.“

A structurally fragile sector, dependent on Bitcoin

While the day’s surge caught attention, it should not overshadow a structural reality: memecoins remain among the riskiest assets in the crypto ecosystem. Kadan Stadelmann, Technical Director at Komodo, is straightforward: “The fundamentals of the memecoin market are generally weak and driven by speculation.“

This observation has consequences. In 2025, the number of failed crypto projects surpassed 11.6 million, an absolute record, according to an analysis by CoinGecko signed by Shaun Paul Lee. Memecoins, often lacking real use cases, greatly contributed to this slaughter.

On social networks, the platform Santiment observed a renewed discussion around memecoins this Monday. But the tone is ambivalent: investors denounce repeated scams, while remaining attracted by the promise of quick profits. A contradiction that reveals much about the psychology of this market.

For 2026, Stadelmann points out a decisive factor: Bitcoin. “The performance of memecoins will depend, as usual, on BTC. Yet, it underperformed gold in 2025, and the same could happen this year.” A scenario that would be clearly unfavorable to the most speculative market assets.

Monday’s peak looks less like a renewal than a last speculative breath. As long as bitcoin does not regain solid and lasting momentum, memecoins will remain what they have always been: high-risk bets, driven by momentary enthusiasm, and often punished by the market.