Last Friday's leverage-triggered liquidation has structurally shifted market capital and attention: from perpetual contracts to spot trading, from centralized exchanges (CEXs) to decentralized exchanges (DEXs), and from major cryptocurrencies to low-cap altcoins.
Traders' appetite for high-yield opportunities hasn't vanished—it may even have intensified due to revenge trading psychology. Liquidity will flow to the most promising opportunities, potentially fueling a new Memecoin supercycle.
Memecoins offer high-yield potential, requiring less capital for substantial short-term returns without liquidation risks (though tokens can still plummet to zero).
Shifting market conditions create fertile ground for a Memecoin resurgence, where reflexivity will replace leverage as the dominant mechanism. Price appreciation itself becomes the most effective marketing tool.
The Solana ecosystem may once again become the epicenter of Memecoin mania, as capital cross-chains from BNB Chain to Solana, boosting on-chain activity.
Trading strategy favors early exposure to newly launched Memecoins, which offer the highest upside unburdened by historical baggage and can more easily ignite reflexive feedback loops.
Attention is the core driver of Memecoin valuation. They are inherently reflexive instruments—low float, high turnover, and prices dictated by attention.
Monitor signals like rising DEX volumes, increasing new trading pairs, and growing market caps of new tokens to capture the Memecoin revival trend.
Author: Baba
Compilation: Luffy, Foresight News
Last Friday's mass liquidation left many investors reeling—a fate I wish upon no one. Yet, like a forest reborn after wildfire, the crypto market will birth new opportunities.
With leverage wiped out and basis trades collapsed, capital and attention are structurally forced to migrate: from perpetuals to spot, from CEXs to DEXs, from blue-chips to small-caps. This shift heralds a new on-chain cycle where reflexivity, not leverage, will dominate.
Though the crash instilled leverage aversion, traders' hunger for high returns remains undiminished—potentially amplified by revenge trading urges. Liquidity doesn't vanish; it merely flows to the most compelling opportunities.
This environment perfectly sets the stage for a Memecoin supercycle.
As participants return to primal trading dynamics, on-chain spot activity will revive, with Memecoins uniquely positioned to capture attention. Their return profile rivals leveraged positions—minimal capital can yield explosive short-term gains, sans liquidation risks (disclaimer: tokens can still go to zero).
The Trader's Perspective
Why do traders prefer perpetuals over spot? The core appeal lies in capital efficiency, accessibility, and flexibility—critical in fragmented, volatile crypto markets. Traders aim to maximize risk-adjusted returns per unit capital.
Spot trading requires full collateralization for 1:1 exposure, while perpetuals break this constraint. Margin deposits unlock larger positions, amplifying gains (and losses). In crypto, capital is precious—efficient deployment naturally attracts traders.
Cryptocurrencies are among the most volatile assets, offering outsized short-term returns. But high reward bears high risk: vertical green candles during pumps, abyssal red ones during dumps. This lures risk-tolerant traders, whose theoretical upside is infinite, while losses are capped at margin.
Essentially, perpetuals inject rock fuel into already volatile assets—letting traders chase mythical 1000x gains on "safer" coins than on-chain Memecoins.
But reward and risk are inseparable: funding rate inversions, premature margin calls, and exchange solvency risks abound. Yet traders accept these, for perpetuals' return structure is irresistible. Traditional markets thrive on stability; crypto feasts on chaos.
Volatility, narrative shifts, and new base protocols are crypto's norm. In fast-decaying information environments, chaos perpetually spawns new opportunities. Here, risk-taking isn't irrational but strategic: if markets reset periodically, early and aggressive action outperforms cautious waiting. Crypto rewards the swift, not the verified.
Market Incentives
With perpetual sentiment at recent lows, a new mainstream play emerges. Sharp teams already recognize this, brainstorming ways to capture attention—from airdrops to product launches. The coming weeks will likely see major project updates. As history shows, timing often dictates success.
Take WIF: its launch timing was impeccable. Solana was ascending, the community was flush with JTO airdrop liquidity, and the Memecoin supercycle was nascent. Had WIF launched in January 2024 amid established Solana Memecoin leaders, it would've drowned among thousands of daily launches.
If I were Alon of pump.fun, the Bonk.fun team, or a Solana Foundation member, I'd strive to refocus attention on Solana—simplest by reviving Memecoins. They once drove user adoption for Solana; they can again. Typically, price pumps are the best marketing, and Memecoins require the least capital to ignite.
Once reflexivity and speculation activate, high-market-cap Memecoin prophecies self-fulfill. FOMO kicks in: a Memecoin pumps → traders FOMO in → price targets escalate → bullish voices amplify → copycats rise → more Memecoins launch. This flywheel reinforces speculation and validation.
If Memecoin bulls like @theunipcs and @miragemunny regain social media traction, it signals hype returning. For pump.fun and Bonk.fun, activity boosts fee revenue, driving PUMP and BONK buybacks. Current USELESS and NEET price action may be early signs.
Now consider traders who lost everything in the liquidation. They typically face two choices:
Exit crypto temporarily to reassess strategies;
Embrace higher risks via revenge trading.
I don't endorse emotional trading, but our goal is predicting behavior, not prescribing it. These are risk-seeking individuals—naturally drawn to opportunities promising full recovery. Once Memecoins show momentum, they'll likely deploy capital there.
Attention and Capital Flows
Memecoins are the purest currency in the attention economy. Why do they hit billions in valuation with zero fundamentals? Attention.
Attention directs crypto capital flows. This explains why quality products don't always pump, while clunky ones like Cardano excel price-wise. Protocols take years to build value, but crypto attention spans are goldfish-like—expectations focus on weeks or days ahead. Thus, price action rarely reflects fundamentals, instead driven by Twitter hype and Telegram chatter.
In the attention economy, Memecoins are perfect attention sinks. They're inherently reflexive tools: small floats, high turnover, prices dictated by attention. Injecting $1M into a $10M-market-cap Memecoin creates 10x the volatility of injecting into a CEX altcoin. This convex return structure attracts post-liquidation capital back to the Memecoin casino.
Resulting attention vacuums lure bystanders—no one resists vertical green candles, further fueling the Memecoin cycle.
In crypto's risk economy, leverage and reflexivity are substitutes. When perpetual leverage abounds, spot reflexivity is suppressed; when leverage implodes, spot reflexivity dominates.
Pre-crash, perpetuals hit all-time highs in attention and liquidity, thanks to Hyperliquid's success and rivals like Lighter and Aster. Meanwhile, Memecoin sentiment and attention hit cycle lows. Charts were ugly, players migrated, social media mocked Memecoins, sellers had nothing left to sell. This precisely sets the stage for a rebound.
My personal views on Memecoins' net impact on crypto waver, but my opinion is irrelevant. Ultimately, markets and prices will decide if Memecoins replace perpetuals as the focal play. This is a Keynesian beauty contest in modern markets: investors don't pick what they find most beautiful, but what they think others will find beautiful.
In the current landscape, Memecoins seem most likely to win the contest. They perfectly match perpetual traders' desires—high returns, high volatility, minimal short-term capital. With many now wary of liquidation risks, attention is primed to shift, and capital will follow.
The Solana Landscape
The 2023 Memecoin mania began on Solana, which may again become its center. Though current Memecoin sentiment and on-chain activity are low, minimal upward momentum could reverse this. As charts show, pump.fun volume and fees have declined since mid-September—even as Bitcoin rebounded from September lows and hit new all-time highs in October, on-chain activity didn't recover.
Over the past 7 days, BNB Chain saw the largest capital outflow, with 11% bridging to Solana. This signals that profits from the Binance frenzy are returning to Solana's on-chain ecosystem. If this continues, a sizable portion will likely flow into Memecoins.
Trading Strategy
Assuming post-liquidation attention and capital return to Memecoins, the trading strategy is straightforward: if you believe in the Memecoin revival thesis, early positioning offers the highest expected value.
Though leaders from the last Memecoin cycle may rebound with revived activity, the largest upside lies in newly launched Memecoins. New tokens mean fresh memes, fresh code, fresh possibilities—the engagement heat these generate far surpasses stories already priced into old coins.
Old coins carry baggage: previous highs, bagholders, broken narratives. New coins are unburdened—no psychological price ceilings, no community legacy issues—making it easier for traders to believe "this time is different." The first few green candles create the illusion of discovering the next big thing, enough to ignite reflexive feedback loops.
As past Memecoin cycles show, early trend adoption pays, for leaders often emerge at the mania's onset. WIF and FARTCOIN launched early in their respective uptrends, gaining time to accumulate users. No Memecoin pumps vertically forever: they need deep pullbacks to shake out early holders, offering attractive entry for hesitant traders. This forges stronger holder bases, wider token distribution, and more attention.
Before new Memecoin leaders emerge, none can predict their form. Thus, now is the time to closely watch Twitter, Telegram, and Dexscreener for Memecoins with potential to become the next on-chain leader. When researching, consider:
Total Addressable Market (TAM): Does it only resonate within crypto, or can it reach mainstream (e.g., FARTCOIN)?
Who is incentivized to drive its success? Are major players staking their reputation?
What is the consensus narrative? What story fuels price appreciation?
How viral is the meme? Does it self-propagate?
This list isn't exhaustive, and leaders may defy all criteria. The goal is to train your mind on key drivers of Memecoin attention.
Conclusion
I can't guarantee the Memecoin revival thesis, nor should you blindly buy every new token on Dexscreener. But this is a trend worth watching, with clear signals for attention returning to Memecoins: rising DEX volumes, new trading pairs, growing new token market caps, increased chart-sharing on social media. Have conviction in something.
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