n February 27th, 2024, two prominent meme tokens – Pepe (PEPE) on Ethereum and Dogwifhat (WIF) on Solana – saw explosive gains over the past 24 hours. According to data from CoinGecko, PEPE rallied as much as 51% while WIF surged over 65% during this period. This impressive price action pushed the broader memecoin category average gains to over 13% across various blockchain networks.
Meme Tokens Charge Ahead
The massive surge in these speculative tokens came amid a wider crypto market recovery. Ether climbed more than 8% on the day to surpass major resistance at $3,000 while Solana also added over 8%. bitcoin continued its climb above the critical $57,000 level. However, meme coins significantly outperformed these major cryptocurrencies, attracting significant trader interest.
On futures exchanges, less than $5 million in PEPE contracts were liquidated during the price spike, indicating buying pressure from the spot market fueled the rally. Six large wallets selling over $4 million in PEPE tokens contributed to some selling pressure later in the day as traders booked profits. Still, the upside action underscored how meme coins are increasingly viewed as speculative proxies to bet on the growth of underlying blockchain protocols.
A Bet on Blockchain Development
The parabolic price moves in PEPE and WIF align with the growing popularity of meme tokens as a way to speculate on the expansion of the Ethereum and Solana ecosystems. Some analysts note that rallies in large-cap crypto assets tend to "trickle down" to altcoins and meme coins as traders rotate profits in search of diversification and additional upside plays.
As their prices are largely delinked to intrinsic value, meme tokens offer traders highly leveraged exposure to developments across various layer 1 networks. For example, the Avalanche Foundation announced investments in popular meme projects on its ecosystem in recognition of their utility in driving engagement and community activity. Similarly, new developers, protocols, and activity on Ethereum or Solana could fuel further speculative demand for native meme coins.
Of course, meme tokens also remain extremely high-risk speculative assets prone to volatility. On Tuesday, over $4 million in PEPE selling pressure came from just six large wallets likely taking profits from the parabolic gains seen over the past 24 hours. Still, events like token burns or new viral trends have propelled certain meme coins to unprecedented heights in the past. As long as their underlying networks capture more developer and user interest, tokens like PEPE and WIF may continue drawing speculative frenzies from traders betting big on blockchain growth.
