The other side of the Solana Meme collective frenzy: most will experience a crazy 70% pullback, and liquidity bottlenecks have become the norm
Quite a few memes have reached an ATH of over 100 million dollars, but very few can sustain that.Source: smolresearcharc X account
Author: Smolresearcharc (summer period)
Compiled by: Deep Tide TechFlow
A few days ago, @cryptowhail posed an existential question to me at five in the morning: "Are we currently in an active period for the SOL market?" This question made me start thinking about how Memes on the SOL chain have performed since the fourth quarter of last year.
We looked at the data. This data comes from the SOL Memes published by @CryptoKoryo through the dune dashboard over the past few months. It was a manual process of selecting Memes and finding the data, but I think we did quite well.
We plotted a comparison chart of the current market cap (blue) over the past few months against the all-time high (orange + blue):
November 2023: PEEP, WIF
December 2023: VONSPEED to POPCAT
January 2024: BLOCK to SOLAMA
February 2024: SNP to CHAT
March 2024: ACAT to BOME
April 2024: POOWEL to MANEKI
May 2024: BUNI to CRODIE
Some Observations:
Breaking through a market cap of 300 million is very difficult, let alone breaking through 1 billion. Only WIF, MYRO, POPCAT, SC, BODEN, SLERF, BODEN, MEW, and BOME have successfully broken through.
Currently, only WIF, POPCAT, and MEW (barely) have market caps exceeding 300 million. This shows how difficult it is to maintain a high market cap in this Meme-saturated environment.
Quite a few Memes have ATHs exceeding 100 million, but very few can truly sustain it. Besides those mentioned above, we also have MYRO, SC (barely holding), BODEN, SLERF, and MICHI.
Most Memes have huge drawdowns (see the ratio of orange to blue). Unfortunately, due to data skew from WIF and BOME, the average drawdown from the all-time high (ATH) for all Memes is 72%. This indicates that you must work very hard to chase winners or those coins with higher liquidity (like WIF's CEX liquidity, or those new coins with less drawdown).
Significant drawdowns include:
PEEP: down 95% from ATH ($24 million) - November 2023
VONSPEED: down 92% from ATH ($8.2 million) - December 2023
SILLY: down 91% from ATH ($161.4 million) - December 2023
KPOP: down 91% from ATH ($24.3 million) - January 2024
WYNN: down 96% from ATH ($84.2 million) - January 2024
AMC: down 91% from ATH ($10.6 million) - February 2024
ACAT: down 91% from ATH ($8.3 million) - February 2024
AABL: down 93% from ATH ($54.7 million) - March 2024
PENG: down 93% from ATH ($213.8 million) - March 2024
MIMANY: down 92% from ATH ($44.2 million) - April 2024
HAROLD: down 93% from ATH ($58.9 million) - April 2024
HOBBES: down 97% from ATH ($132.6 million) - April 2024
DEVIN: down 98% from ATH ($14.9 million) - May 2024
Interestingly, I initially thought the data would show a downward spiral as illustrated below, but there seem to be some standout performances (BOME has ample liquidity, and insiders know it will be listed on Binance). Notably, besides BOME and WIF, no other meme coins have been listed on Binance.
What do the data really tell us?
It is very difficult to break through certain market cap levels: 30 million/100 million/300 million, let alone maintaining it after a significant drop; it still appears to be a trader's market.
The drawdown from ATH is very brutal. An average drawdown rate of 72% and an average liquidity of 3% (compared to current market cap) means that if you join at the top, it is hard to withdraw your initial investment.
@cryptowhail comments on us entering an active phase for SOL Memes may not be as accurate as people imagine. For this, we need to see more winners that beat POPCAT or MYRO in April/May.
But for now, SOL is where your bets are. On-chain trading volume is rising. The combination of Pump.fun and multiple Memes launching daily on SOL means everyone is keeping a close eye on their bots and wallet trackers, trying to catch the next winner (by the way, it seems the winners are dwindling unless you want to make 2-3 times your investment). However, we are in the trenches working hard for that miraculous 100x.
