As the dollar weakens, liquidity indicators rebound, and inflation data shows marginal improvement. Despite these positive changes, MEME Coin, which was once one of the strongest narratives of this bull market, continues to perform poorly, seemingly showi

The strengthening of the U.S. labor market led to a peak in the altcoin market in early December 2024. In mid-December 2024, after Federal Reserve Chairman Powell indicated that interest rates might remain unchanged due to inflation pressures from the Trump administration's tariff policies, BTC entered a consolidation phase.

As the dollar weakens, liquidity indicators rebound, and inflation data shows minimal improvement, MEME Coin, which was once a major force in this bull market, continues to perform poorly, with no signs of recovery in sight.

Inflation Pressures Lead to Global Market Reactions

The strengthening of the U.S. labor market led to a peak in the altcoin market in early December. After Federal Reserve Chairman Powell hinted at the possibility of interest rates remaining unchanged due to inflation pressures from the Trump administration's tariff policies, BTC entered a consolidation phase in mid-December. While the Fed anticipates some inflationary impact from tariffs, the rapid and aggressive implementation of tariffs by Trump exceeded the expectations of most economists, setting off a chain reaction in both the stock and crypto markets.

Despite this week's U.S. inflation report showing a slight improvement over expectations, it failed to provide much comfort. The ongoing uncertainty surrounding trade policies continues to make the market pessimistic about the Fed taking any easing measures in the near term.

Clear Consolidation for MEME Coin, Significant Decline in Pump.fun Revenue

For MEME Coin, signs of consolidation are very evident. Since February, the price of Raydium (a liquidity provider for the Solana-based automated market maker and Serum decentralized trading platform) has plummeted by 71%, while Solana itself has dropped by 37%.

Pump.fun is a decentralized trading platform (DEX) based on the Solana blockchain, which has become a popular platform for traders to quickly launch, discover, and speculate on meme coins. The platform supports the rapid creation and trading of tokens, often leading to extremely volatile market activity. Over the past 12 months, the Pump.fun platform has generated over $582 million in revenue, making it one of the most profitable crypto projects of this cycle. However, its revenue growth has recently declined sharply.

Weakness in the Altcoin Market, Market Funds Become More Cautious

The weak momentum in the altcoin market in December, together with the burst of the MEME Coin bubble in January, has seen the cryptocurrency market capitalization decrease by $1 trillion, moving from $3.6 trillion to $2.6 trillion. This redistribution of wealth may cause investors to become more cautious about making further investments, which could limit the rebound potential despite the better-than-expected inflation data.

The closure of fully realized arbitrage positions by hedge funds has been a major driver of the recent selling pressure. This anticipated selling has largely been completed and may now be approaching its peak intensity.