Why are memecoins up today?

Dogecoin (DOGE), Shiba Inu (SHIB) and Dogwifhat (WIF) rallied as the entire cryptocurrency market flashed green on Oct. 30 following an expanding market cap and increasing trading volumes.

Expanding memecoin market cap

Data from CoinMarketCap shows that the total market capitalization of memecoins has jumped in the last four days, rising 20% from $53.4 billion on Oct. 26 to $64.2 billion on Oct. 30. The aggregate market value of cryptocurrencies in this sector is up 188% year-to-date.

The total daily trading volume across the memecoin sector has increased by more than 800% over the same period.

Dogecoin, the largest memecoin by market capitalization, rallied the most, gaining 6.5% over the last 24 hours and 25% over the last week. DOGE’s rival SHIB followed with 4% daily gains, and Mog Coin (MOG) came in third after rallying 4% over the same period.

Notably, DOGE’s $25.5 billion market currently accounts for nearly 39% of the memecoin sectors’ total market share.

Related: Why is Dogecoin (DOGE) price up today?

​​Memecoin trading volumes on the rise

As earlier reported by Cointelegraph, memecoin weekly trading volume has been increasing since late August.

Data from Dune reveals that memecoin transaction flows across all blockchains, including Ethereum and Solana, have grown collectively by 230% from its recent low of roughly $87.5 million at the end of August to a high of $291.1 million the week ending Sept. 23. 

The cumulative trading volume for all memecoins has crossed the $52 million mark to rest at $52.4 billion.

Notably, the volume is still significantly lower than its peak of $997.7 million experienced in March. This suggests that as traders’ interest or confidence in the sector increases toward March levels, memecoins will likely continue rising.

In addition, market news, such as the introduction of an advanced trading terminal and the possible launch of a native token on Pump.fun, a Solana memecoin creation tool – has added to the bullish sentiment in the memecoins sector.

Massive crypto liquidations accompany memecoin rally

Futures market data from CoinGlass show that the ongoing crypto market recovery has wiped out more than $184 million in leveraged positions within the past 24 hours, with over $7.7 million in DOGE shorts and more than $874,700 PEPE longs accounting for the majority of liquidations across memecoins.

Similarly, more than $634,000 in WIF shorts and $443,700 in SHIB shorts were liquidated over the same period.

Crypto prices, including those of memecoins, are positively affected when short derivative positions are liquidated as increasing buying pressure and high demand-side trading volume overpowers short traders.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.