The bloodbath continues to spread: meme coins in the massive sell-off in the crypto market are gradually collapsing

liquiditea_sipper · 2026-01-04T16:56:11+00:00

On Friday night, the cryptocurrency market experienced intense volatility, with over $20 billion in funds flowing out. Bitcoin dropped from $71,000 to $65,000, and meme coin market capitalization evaporated by nearly 20%. BONK declined by 25%, PEPE fell by 21%, and several popular coins suffered heavy losses. Risk investors are under immense pressure, warning of the high risks associated with leverage trading.

liquiditea_sipper

2026-01-04 16:56:11

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On Friday evening, the entire cryptocurrency market experienced a wave of intense volatility. In just a few hours, over $20 billion in funds flowed out of exchanges, with 24-hour liquidation volumes surging to nearly $900 million. During this significant correction, the worst performers were undoubtedly the meme coin sector, known for its volatility.

Bitcoin led the decline, dropping sharply from a morning high of $71,000 to a weekly low of $65,000. However, the real pain was felt in the altcoin space. According to CoinGecko data, the entire meme coin sector lost nearly 20% of its market cap within 24 hours, currently hovering around $54 billion. Meanwhile, the overall crypto market capitalization shrank by 6.5%, making meme coins’ performance notably more severe.

Divergence in the Decline of Different Coins

BONK spearheaded this downward trend, with a maximum intraday drop of 25%. This popular token based on the Solana ecosystem plummeted below $0.000017. WIF followed closely, with dogwifhat also recording double-digit declines, dropping from a recent high of around $5 to below $3, causing heavy losses for investors in a short period.

PEPE’s daily decline remained at 21%, while FLOKI, SHIB, and DOGE fell by 20%, 13%, and 12%, respectively. These former market favorites faced collective pressure within a single day, reflecting that meme coin investors’ risk tolerance is being pushed to the limit.

Warnings Behind Market Data

According to on-chain tracking data from CoinGlass, nearly $900 million in losses were caused by forced liquidations over the past 24 hours. The rapid contraction of the meme coin sector’s market cap further exposes the high dependence of these assets on market sentiment and leverage trading. When large sums of capital start to exit and leveraged positions trigger chain reactions of stop-losses, these small-cap coins often become the biggest victims.

This scene serves as a reminder to market participants: engaging in leveraged trading within high-risk sectors like meme coins involves volatility and risks far exceeding those of traditional cryptocurrencies. Caution should be a prerequisite for entering such niche markets.

BTC1,28%

BONK0,54%

WIF1,98%

PEPE1,26%

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