PEPE's Violent Surge of 65%: When "Smart Money" Starts Betting on Meme, Is It a Bubble Upgrade or a Paradigm Shift?
#MEME, #2026行情预测 As leverage and consensus become the new narrative, the valuation logic of Meme coins is quietly being rewritten by institutions.
In the past week, the crypto market spotlight was stolen by a frog. PEPE surged 65% against the trend amid Bitcoin's pullback and Ethereum's weakness, with its on-chain open interest once reaching a historic peak of 75 trillion tokens. This is not retail frenzy—data shows a large influx of high-leverage positions into this token born from a frog meme.
The "Meme season" seems to be ringing again. On the BSC chain, a Meme coin called "I'm Coming" surpassed $20 million in market cap within 24 hours, with a daily increase of over 63%. Meme communities on Ethereum, Solana, Base, and other public chains are reactivating, with discussion heat rising sharply.
But this time, the story has a subtle difference. Leverage funds, technical analysis, institutional-level narratives—these traditional financial market terms are being skillfully applied to Meme coins once considered "pure gambling." Is this the start of a new experiment, or a prelude to an even more dangerous bubble?
1. Data Decryption: Who Is Driving PEPE Up?
PEPE's rise is not untraceable. On-chain data shows its open interest peaked in early January, with a large number of high-leverage positions quietly accumulating before the price started to move.
• "This isn't retail behavior," independent analyst Tom Wong pointed out. "75 trillion in contract holdings requires professional fund management and risk control capabilities; ordinary investors find it hard to do."
• This phenomenon isn't new. Early 2024, when Dogecoin bottomed around $0.06, saw a 300% surge in open interest. Three months later, DOGE hit $0.22, up over 260%.
• PEPE's technical chart is also "perfect": the price broke out of a multi-month descending wedge, with the key support at $0.0000040 tested 8 times. Volume expanded during rallies and contracted during pullbacks—classic signs of institutional accumulation.
• "Meme coins are becoming 'institutionalized'," wrote Pantera Capital analyst in a recent report. "When hedge funds start trading Meme coins with derivatives, and technical analysis becomes effective on these tokens, we may need to redefine this asset class."
2. Ecosystem Evolution: From DOGE to PEPE, Three Generations of Meme
Meme coin development has gone through three distinct stages:
• First Generation: DOGE (Dogecoin) - Born in 2013, initially a joke, later propelled by Musk into a phenomenon token. Its core is "community faith" and "celebrity effect."
• Second Generation: SHIB (Shiba Inu) - Exploded in the 2021 bull market, attempting to shed the pure Meme label by building a "decentralized ecosystem" (ShibaSwap, Shibarium, etc.) towards "usefulness."
• Third Generation: PEPE as a representative - Returning to Meme essence but adding mature financial tools and trading strategies. Leverage, futures, technical analysis are standard, with the community proficient in financial play while maintaining Meme culture.
"SHIB tries to become serious, but PEPE tells us that admitting you're here to gamble is actually a form of sincerity," said CryptoKale, a well-known Meme coin researcher. "The new generation of traders no longer needs the 'use case' cover—they directly play with liquidity, volatility, and sentiment."
This shift is especially evident at the public chain level. Ethereum, Solana, BNB Chain, Base, and others have their leading Meme coins. Meme ecosystems across chains resemble an arms race, becoming key indicators of chain activity and community cohesion.
3. Risk Structure: The Leverage Tower of Babel
• Behind PEPE's frenzy, risks are also accumulating. Data shows about 60% of its open interest is over 20x leverage. This structure is like a castle built on quicksand—huge gains during upward moves, but once reversed, chain liquidations could cause a free fall.
• "Current social media sentiment index has reached 94 (out of 100), close to the peak level of Dogecoin in May 2021," warned Joe Vezzani, CEO of LunarCrush. "Historically, when Meme coins' sentiment hits such extremes, it often signals a short-term top."
• External risks cannot be ignored. The upcoming January FOMC meeting, uncertainties around Trump administration's crypto policies, and macro black swan events could burst the Meme bubble.
• The more fundamental issue is that Meme coins lack the intrinsic value anchors of traditional assets. "Their value is entirely based on collective belief, and belief is the most volatile thing in the world," said behavioral finance professor Richard Peterson. "Once newer, more interesting Memes emerge, funds will migrate without hesitation."
4. Investment Logic: How to Dance with Meme?
1. For investors wanting to join the game, strategies must be extremely clear and cautious:
• Top-tier strategy: Focus on proven leading Meme coins like DOGE, SHIB, PEPE. They have the best liquidity and strongest consensus, making them "relatively safe." Consider staggered entries during deep pullbacks, e.g., DOGE below $0.12, SHIB below $0.000007.
• Public chain strategy: Avoid directly buying high-risk Meme coins; instead, invest in their underlying chain tokens like SOL, BNB, ETH. The Meme craze boosts these chains' trading volume, users, and attention, offering a more stable value capture.
• Lottery strategy: If chasing new Meme coins, treat it as "lottery." Limit position size to no more than 5% of total portfolio, with strict stop-loss (e.g., -30%). Take profits quickly and only continue playing with gains.
Strict rules: Never use leverage, never trust "scientist calls," never chase highs during FOMO peaks, and never invest funds affecting your life.
5. Future Projections: Guessing the Endgame of Meme Coins
The future of Meme coins may head in three directions:
• Scenario 1: Cyclical Assets - Meme coins become crypto's "volatility providers," periodically performing in mid-to-late bull phases. Each frenzy leaves chaos behind, but the next cycle will come again. This is the most likely scenario.
• Scenario 2: Mainstream Assets - A few top Meme coins (like DOGE) gain recognition through ETFs and other mainstream financial products, becoming part of alternative asset allocations. This requires regulatory breakthroughs and institutional backing, with lower probability but possible.
• Scenario 3: Bubble Burst - Regulatory crackdown or a catastrophic collapse destroys market confidence, causing Meme culture to fade from crypto mainstream. Given their resilient community, this scenario has the lowest probability.
"No matter the outcome, Meme coins have proven that narratives and communities in the digital age are a form of asset," summarized a16z crypto partner Chris Dixon. "The question isn't whether they have 'intrinsic value,' but whether we're ready to understand this new form of value."
When PEPE's candlestick chart begins to be taken seriously by technical analysts, when hedge funds allocate leverage to Meme coins, and when the "sentiment index" becomes a decision reference— the game rules of Meme coins have changed. This is no longer an amateur playground but a new table for professional gamblers.
The frog PEPE's surge is just the beginning. As more institutional funds and financial tools enter this space, Meme coin volatility will intensify, narratives will become more complex, and risks and opportunities will be amplified. The only constant is: in this game of pure emotion and liquidity, the last to leave are always the ones paying.
Markets reward narratives but favor clarity even more. In the Meme frenzy, is your position fuel for emotion or a rational bet? Remember, in crypto markets, most profits come from patience and catching a few key trends, not frequent trading on every hot spot. Meme market moves fast—faster than you think. When everyone is talking on the streets, it's usually the end.
6. If you really feel itchy, you can place your orders and then forget about them completely.
General principle: Treat Meme coin investing as "lottery" or "risk hedging," not "value investing." Limit positions to no more than 5% of total funds. Focus your main energy and capital on the genuine value discovery and trend strategies we discussed earlier.
Option A: Focus on absolute leaders (moderate odds, higher probability)
1. Split 5% into two parts.
2. Use limit orders: place buy orders at DOGE $0.10-0.12, SHIB $0.000006-0.000007.
3. If filled, set stop-loss at 20% below purchase price.
Logic: Bet on the return of the old kings. They have the strongest survival ability and brand effect, and will perform in bull markets.
Risk: Long-term consolidation possible, very low capital efficiency.
Option B: Chase hot new Meme coins (high odds, very low probability)
1. Split 5% into three parts.
2. Never chase highs. Only pick 1-2 new Meme coins with strong communities and deep liquidity (not PEPE or already surged coins).
3. During the first deep correction after a volume spike (-30% or more), invest the first 50U. Strictly set a -30% stop-loss.
4. Take profits quickly and only continue playing with gains.
Logic: Play for ultra-high elasticity. Similar to the performance of BSC coins in dynamic B scenarios.
Risk: Highest risk of zeroing out, liquidity may evaporate instantly.
Option C: Indirect participation via mainstream coins (lowest risk)
Do not buy Meme coins directly. Use this part of the funds to increase holdings of SOL or BNB.
Logic: Meme hype will bring huge trading activity, gas consumption, and attention to their underlying chains, directly benefiting chain tokens. This is a safer, more sustainable way to capture value.
Strictly prohibited actions:
Trust any "wealth code" or "scientist calls."
Chasing high on the day of rapid rise or during extreme FOMO (e.g., social sentiment index 94).
Using leverage or funds affecting your life.
7. Final Advice and Mindset Management
Currently, it is strongly recommended to stay on the sidelines.
• Not the right time: A sustainable Meme boom requires BTC, ETH, and other core assets to have clearly entered a phase of accumulation after a confirmed bull pattern, with abundant market liquidity. Conditions are not yet ripe.
• Low cost-effectiveness: PEPE and similar tokens have already surged sharply in the short term; risk/reward ratio is poor. DOGE and SHIB are still struggling at the bottom, with uncertain timing for revival.
• Protect principal: In the early bull phase, safeguarding principal and core holdings (BTC, ETH, quality altcoins like UNI) is more important than chasing high-risk volatility.
Please note: This content is compiled from public market analysis and historical data, intended for informational purposes only and does not constitute investment advice. Crypto markets are highly volatile; any investment decision should be based on independent research.
