Memecoin market still in a slump despite global liquidity improving

Analysts have indicated that the memecoin sector remains significantly impacted by the recent crypto market downturn, despite an increase in global liquidity.

It appears that memecoins are showing no signs of recovery following the notable crash in mid-February. Although the weakening of the U.S. dollar has led to a rise in liquidity and positive shifts in inflation indicators, the memecoin market appears largely unaffected, as detailed in recent analyses.

In an earlier report, analysts had alerted traders to an impending consolidation phase in the crypto space, particularly affecting memecoins. Recent assessments have indicated that liquidity within Solana (SOL)-based automated market makers, such as Serum, has tightened, with Raydium’s total value locked plummeting by 71%. Additionally, Solana’s own TVL has decreased by as much as 37%.

The increase in global liquidity, measured by the money supplies of 28 central banks worldwide, would typically serve to boost alternative investments. Moreover, the latest U.S. inflation report revealed outcomes that were more favorable than anticipated, although uncertainty surrounding trade policies continues to cloud the possibility of the Federal Reserve easing their monetary stance.

When central banks release more liquidity into the market or sustain supportive policies, investors tend to feel more inclined to invest in high-risk assets, like cryptocurrencies, which can lead to price surges and heightened trading volumes.