This strength aligns with a broader uptick in crypto market activity.
While the broader crypto market dips 1.41%, the memecoin sector is bucking the trend. It is up 7.28% at press time, now sitting at a hefty $71.14 billion in market cap.
This kind of divergence has historically hinted at the start of a "memecoin supercycle", where speculative momentum goes parabolic.
According to AMBCrypto, several early-stage indicators suggest the setup is "very much in play."
The memecoin space is crowded, but a couple of heavy-hitters are leading the pack.
As of press time, Pepe [PEPE] has surged 77% month-to-date, while dogwifhat [WIF] has outperformed with an impressive 130% gain over the same period.
The critical breakout window was the from the 9th to the 17th of May. While Bitcoin chopped sideways between $102k-$105k, WIF pulled off a clean 50%+ move, reclaiming the $1 mark for the first time since late January.
Simultaneously, PEPE pushed through its $0.000015 supply wall, achieving nearly a 30% gain, signaling strong spot demand and accumulation.
According to AMBCrypto, this price action reflected classic speculative rotation. The one where capital moves out of Bitcoin and into high-beta meme assets.
Fast-forward to now: Both assets are cooling off. WIF's down 21.65%, PEPE's slipped 13.68% on the week - typical post-rally retrace. But the setup remains interesting.
Risk-off sentiment has re-emerged as Bitcoin [BTC] encountered a liquidity squeeze, resulting in a sharp 3.21% intraday pullback to $103k at press time.
This liquidity stress has triggered a rotation of capital out of the crypto market, with investors actively deleveraging. Evidence of this is clear in WIF's 10.26% drop in Open Interest (OI).
Despite the macro headwinds, smart money continues to accumulate selectively in high-beta memecoins.
A notable PEPE whale withdrew 420 billion tokens at $0.00000132, pushing its total off-exchange holdings to 2.21 trillion PEPE in under 72 hours. Interestingly, top WIF wallets holding over 10k tokens have also seen a noticeable uptick.
This kind of setup has historically preceded a memecoin "supercycle"- a phase where Bitcoin's choppy structure drives capital into "high-risk, high-reward" assets.
Smart money inflows are often the earliest signal, and right now, that signal is flashing again.