Early Stage Rotation in Meme Coins: Analysts Hopeful

In the early days of the year, the rapidly rising cryptocurrency rally has brought meme coins back to the attention of investors, while early portfolio rotations are drawing attention. With the recovery process following the holidays, altcoins, especially meme coins, showed the strongest performances of the week in the cryptocurrency market.

The increasing risk appetite in the market has led investors seeking high beta to return to speculative assets. The attention-grabbing PEPE recorded a rise of over 30% during the day, leading the meme coin group with a market capitalization of approximately $2.5 billion. It was followed by POPCAT, based on Solana, and MOG, on the Ethereum network, while established names like Dogecoin, Shiba Inu, FLOKI, and BONK also experienced double-digit increases.

Matt Sigel, the Head of Research at VanEck, reminds us that low liquidity assets, which performed weakly in the final months of the year, tend to react above average in January. According to Sigel, this historical behavior stands out as an important factor supporting the current rise. Jake Kennis, a senior research analyst at Nansen, emphasized that meme coins have suffered significant losses in value in recent months; PEPE and Dogecoin have declined by nearly 80% compared to their peak levels. Kennis noted that this rotation at the beginning of the year could be a precursor to a possible upward movement following a prolonged squeeze period.

Analysts indicate that the rise has not been limited to meme coins. Artificial Intelligence-themed tokens and Bitcoin mining companies have also seen strong buying. ElizaOS caught attention with an increase exceeding 50%, while there was a limited rise in Bitcoin prices. Experts emphasize that the positive returns in January could overlap with stronger performances throughout the year, highlighting the need to closely monitor the first signals from the market.