Memecoin trading is sending a bear market signal, based on the performance of legacy memes. Despite the rise in small-scale token launches, meme tokens crashed in the past year.
The memecoin market showed the first indications of a shift in sentiment, and may be considered a sign that crypto is in the depths of a bear market. Memes usually measure exuberance and the inflow of mainstream retail money. However, there are significant outflows from legacy memes, including the original Dogecoin ($DOGE).
Dogecoin was expected to become a mainstream asset, especially after the major boost from Elon Musk. However, after years of trading, $DOGE unraveled and slid to $0.08, as its narrative strength weakened.
Some of the legacy meme coins and tokens have been mostly abandoned from social media narratives. According to Alphractal data, FLOKI dominates 39.7% of meme trading, $BONK holds 32.2%, and $DOGE stands at 30%. The trading profile of those meme tokens is very different from the Solana meme complex, where small-scale tokens survive for days or even hours, with extremely low volumes as traders constantly chase new additions.
Memecoin index erases bull market gains
The memecoin index by Market Vector erased over 74% of its value since January 2025. The index contains leading meme tokens like $DOGE, SHIB, PEPE, MAGA, $BONK, and the more recently added Pudgy Penguins (PENGU), a representative of the Solana ecosystem.
The Market Vector memecoin index slid by over 74% since January 2025. | Source: Market Vector
In the past year, the index rapidly unraveled, signaling no enthusiasm for an altcoin market. Memes were widely popular during the 2021 bull market, but incurred the deepest losses during the 2023 bear market.
Meme tokens were used to replace other altcoins, which came under scrutiny for potentially being used as unregistered securities. Memes did not make claims to intrinsic value and avoided investigation, which affected other types of tokens.
Meme activity is also seen as an indicator of market reawakening, as well as the beginnings of a bear market. Memes usually reach their peak before altcoins and signal a shift in sentiment. Memes are also an early signal for a general market weakness and lack of positive sentiment. Fewer whales and retail investors want to lock funds for months, awaiting a meme recovery for older tokens.
Memecoin activity shifts to Solana
The reason for the slow performance of legacy meme projects is the shift to the Solana ecosystem.
Over 81% of meme tokens are on Solana, though most of the assets have a minimal market capitalization. Unlike long-term projects like $BONK, the new waves of memes track new social media trends more closely.
Solana took up over 81% of meme tokens, though most assets are short-lived and with low liquidity. | Source: Dune Analytics
New tokens also do not try to form communities or wait for expansion, instead relying on rapid trading and often leading to rug pulls.
New token activity has not been affected by the bear market, as retail has switched to the trenches to avoid getting caught in a downward spiral in BTC and other larger tokens.
