front pagenewsWhy did Memecoins prices plummet today?

Why did Memecoins prices plummet today?

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NOIDA (CoinChapter.com) - On February 25, the memecoin industry collapsed, with major tokens such as Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) suffering double-digit losses. As of now, DOGE is down 20%, SHIB is down 14%, and PEPE has plummeted more than 20% since February 24. The decline was caused by a wave of panic selling, the reasons for which include the collapse of the LIBRA token, reduced liquidity, and broader market instability.
The biggest catalyst was the collapse of Libra coin, a Solana-based project associated with Argentinian President Javier Milei. The coin fell more than 90% in a few days after insiders sold between $87 million and $110 million, sparking widespread distrust in the memecoin. At the same time, big whales drained liquidity pools, leaving speculative tokens vulnerable to a free fall. Meanwhile, Bitcoin (BTC) consolidated below $9,650, U.S. Treasury yields rose, and funds withdrew from risk assets.


DOGE fell by nearly 5% and is currently trading at $0.20005, down from its highest price of the day at $0.21390. SHIB fell by 1.87% to $0.000013386, continuing its downward trend. PEPE fell by more than 4.4% and is trading at $0.0000075409, reinforcing the sell-off.
Political memecoins also suffered. TRUMP plummeted to $12.687, down nearly 90% from its December peak of $60. The biggest loser remains LIBRA, currently trading at $0.1226, down more than 16% on the day and nearly 90% from its February 2025 high.
The collective decline highlights the liquidity crisis plaguing the memecoin space. The exit of whales from liquidity pools, coupled with the fallout from the Libra token collapse, has triggered a massive sell-off that has left the token with little support. Unless sentiment shifts, memecoin could fall further in the coming days.
Liquidity Outflows and Libra Token Collapse
The current memecoin decline was significantly affected by liquidity outflows, exacerbating the crash of the Libra coin. Memecoin generally operates with low liquidity, making it vulnerable to rapid price fluctuations. Recently, major whale wallets have been withdrawing liquidity, converting holdings into stablecoins and Solana (SOL), while flooding the market with excess tokens.


A sudden increase in supply leads to a sharp drop in price, especially for tokens with high market caps and limited liquidity buffers.
The Libra token incident has exacerbated market panic. Libra was launched on the Solana blockchain on February 14 and was supported by Argentine President Javier Milley, with its market value surging to $4.5 billion after Milley promoted it.


However, the token’s value plummeted by more than 90% in a matter of days after insiders gained control of the supply of 82% and extracted approximately $99 million from the liquidity pool.
The withdrawals caused the token’s price to drop to $0.50 on February 15. Miley subsequently deleted his promotional post and denied involvement, further undermining investor confidence. The incident had a significant impact on Solana-based memecoins, with tokens such as Bonk (BONK) and Dogwifhat (WIF) experiencing significant losses.
Additionally, the market faces oversaturation, with hundreds of new tokens being launched every day, diluting liquidity and leading to widespread sell-offs, which could be another reason for the recent memecoin market crash.
Solana was also one of the reasons for the memecoin market crash
Solana, as a prominent memecoin platform, has faced its own challenges, contributing to the overall market downturn. The network has lost about $500 billion in market value over the past month, and its native token, SOL, has fallen by $15-16% since mid-February. This decline is partly attributed to the collapse of the Libra token and the proliferation of speculative memecoins, which saturated the market and weighed on the network’s reputation.
As the value of SOL dropped, memecoins built on the Solana platform suffered disproportionate losses, causing traders to withdraw funds from the Solana project and exacerbating the liquidity crisis.
The entire cryptocurrency market is also facing instability. The ongoing consolidation phase in Bitcoin prices has dampened enthusiasm for other altcoins. The failure of other high-profile tokens, such as Melania Trump’s token, which fell 72% from its peak, has further weakened speculative confidence.
There has been a clear shift in sentiment on social media, especially on platforms such as X. Memes that once drove major price increases are now failing to gain traction, with large investors choosing to liquidate positions rather than take new speculative risks. In the absence of a strong bullish catalyst, the current sell-off is likely to continue, leading to further declines in the memecoin market.

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