Pepe and WIF Lead the Memecoin Charge in Crypto Trading

The Memecoin Surge: A New Frontier in Crypto Trading

by Faruk Imamovic
Pepe and WIF Lead the Memecoin Charge in Crypto Trading
© Getty Images/Jack Taylor

The memecoin frenzy has taken the crypto community by storm this bull season, with tokens like Pepe and WIF skyrocketing into the top 20 cryptocurrencies by market capitalization within a year of their debut. This remarkable ascent has not only captured the imagination of the market but has also cemented the place of memecoins in the highly volatile crypto leverage trading scene.

Memecoins Dominating Open Interest Charts Memecoins have gained considerable traction in the crypto leverage market, where traders speculate on the price movements by going short or long. Astonishingly, four out of the top ten cryptocurrencies by open interest (OI) are memecoins, with Pepe leading the pack. Pepe boasts an impressive $812.6 million in OI, nearly half of Solana’s $1.7 billion.

Besides Pepe, other notable memecoins in the top ten include Dogecoin, Bonk, and Dogwifhat (WIF). Bitcoin holds the top spot with $11.1 billion in OI, followed by Ethereum at $9.15 billion. This stark contrast highlights the varied levels of trader interest, with Bitcoin’s dominance significantly overshadowing smaller coins such as Near Protocol, which ranks tenth with $230 million in OI.

Bullish Momentum Amidst Market Volatility

The recent surge in open interest for memecoins stems from their bullish momentum over the past weeks. Pepe hit a new all-time high, while WIF reached a new multi-week high above $3.30.

Open interest, a critical indicator in the futures market, represents the total number of outstanding derivative contracts that have not yet been settled. For each contract, a buyer and a seller are necessary, and these contracts remain "open" until settled by the counterparty.

An increase in open interest typically signals bullish momentum, as traders open more contracts anticipating further price movements. However, despite the soaring prices and rising OI, the funding rates for memecoins across crypto exchanges have remained negative.

Funding rates reflect the cost of holding a position in a perpetual swap or futures contract relative to the asset's spot price. Negative funding rates suggest a bearish sentiment, indicating that traders expect prices to fall.