The cryptocurrency market witnessed significant declines in meme coin prices on Thursday, reversing much of the gains achieved during the recent Santa Claus rally on Christmas Eve. Among the hardest hit was Fartcoin, a leading Solana ecosystem meme coin, which tumbled 16.8%. Other notable declines included Floki, down 4.5%, and Shiba Inu, which fell 6.5%. Additional prominent losers in the meme coin segment included Brett, Mog Coin, and Popcat.
Conversely, PENGU emerged as the singular bright spot among major meme coins, appreciating by 6% as its total sales surged by 127% in the past 24 hours, reaching $6.1 million.
The broad decline in meme coins can be attributed to a risk-off sentiment within the crypto market, exacerbated by a downturn in Bitcoin prices to $95,000 and a reduction in the overall market cap to $3.32 trillion. Traditionally, altcoins, particularly the highly volatile meme coins, often see pronounced price drops when Bitcoin falters.
The decrease in meme coin prices was also supported by a contraction in liquidity within the crypto sector, consistent with reduced trading activity during the holiday period. Reports indicate that trading volumes for several cryptocurrencies have dwindled as many investors and traders remain inactive. Specifically, Bitcoin’s 24-hour trading volume plummeted to $33.96 million, marking the lowest daily figure since November 3rd.
In parallel, other meme coins likewise experienced reduced trading volumes. For instance, Floki recorded a 24-hour volume of $238 million, marking its lowest in over a month, while Fartcoin’s volume was $187 million, and Shiba Inu’s was $576 million. These reduced trading activities often lead to heightened price volatility.
Concerns over prospective Federal Reserve policy shifts have further influenced market sentiment. The Fed has suggested only two interest rate cuts in 2025, adopting a less accommodating stance, which has prompted bond yields to rise—10-year yields increased to 4.63%, with 30-year and 5-year yields climbing to 4.8% and 4.50%, respectively. Rising bond yields typically exert downward pressure on both cryptocurrency valuations and stock prices.
The prevailing market dynamics reveal a tendency among investors to lock in profits following substantial yearly gains, as evidenced by Floki reaching a peak price of $0.0002885 in November, representing a 200% surge from its August lows, and Shiba Inu attaining $0.000033.
In summary, the volatile nature of meme coins, coupled with broader economic indicators and trading behaviors, provides context to the recent downturn, reflective of the inherent risks and shifts characteristic of the cryptocurrency market landscape.
