Red Monday for Memes: Is the Hype Cycle Officially Dead This Time?

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Meme Coin Market Crash Wipes Out 14% ($40B) Monday (Apr 7
  • Meme coin sector crashes Monday, market cap down 14 percent ($40 billion) from sell-off
  • Major memes plunge: DOGE -19%, SHIB -11%, PEPE -12%, TRUMP -15%, BONK -13% daily
  • Reasons include tariff fears, fading hype (Pump.fun -50% users), smart money exiting

The meme coin sector faced a brutal sell-off Monday, with its total market capitalization dropping 13.87% to $40.23 billion in just 24 hours as broader crypto market turmoil intensified. 

Top meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), Official TRUMP ($TRUMP), and Bonk (BONK) all suffered heavy double-digit percentage losses

What Triggered the Meme Coin Sell-Off?

This sharp downturn results from a combination of macroeconomic pressures and signs that the recent meme coin hype cycle is fading. Renewed investor fears over President Donald Trump’s aggressive global tariff strategy contributed to a wider market decline, hitting risk assets hard. 

Bitcoin dropped below $77,000 Monday (trading near $76,946 at press time), while Ethereum plunged over 18% to trade near $1,490. The specific tariff details (a 10% baseline effective April 5, with even steeper levies slapped on major economies—34% on China, 20% on the EU, and 24% on Japan.

Related: Analyzing TRUMP Token Weakness: Unlock Pressure and Market Doubts

Is the Meme Coin Hype Cycle Fading?

Beyond the macro picture, meme coin specific indicators also point to waning interest. User activity across popular launchpads has fallen sharply. 

Solana’s Pump.fun platform, for example, saw weekly active wallets drop from 2.85 million in January to 1.44 million by late March. Some observers note this decline followed the peak excitement around the TRUMP token launch earlier in the year.

Is ‘Smart Money’ Abandoning Memes?

Data from on-chain analytics firm Nansen suggests “smart money” traders – accounts known for consistently strong returns – are rotating out of the meme coin sector. Nicolai Sondergaard, a Nansen research analyst, confirmed this trend

Related: “YOLO”: Ripple CTO Reacts as Analyst Swaps BTC, ETH, XRP, SOL for DOGE/BONK

While acknowledging smart money capitalized on the recent meme frenzy, he stated they are equally quick “to rotate out of these quickly as well” when momentum fades. Sondergaard added that while these traders remain open to high-risk plays, they are clearly becoming more selective, and meme coins currently don’t appear to be the favored bet. This exit contributes to the sector’s sharp decline.

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