Meme coins led a recovery rally Monday morning, with traders piling into high-risk assets as cooling U.S.-China tensions helping crypto markets rebound after they suffered their worst liquidation event in history.
Dogecoin (DOGE) rose 11.9% to $0.21 over the past 24 hours, while other popular meme coins posted even stronger gains, according to CoinGecko data.
Dogwifhat (WIF) surged by 18.4%, Pudgy Penguins (PENGU) jumped 17.5%, and Pepe (PEPE) climbed 13.2%.
Bonk (BONK) and Shiba Inu (SHIB) climbed 15.3% and 9.4%, respectively, with the total meme coin market cap now standing at $68.8 billion, up 12.6% on the day.
The rebound comes after Friday's devastating selloff that saw Bitcoin (BTC) plunge from $121,000 to as low as $109,000, with nearly $20 billion in liquidations across all digital assets wiped out in a single day.
By Monday morning, BTC had climbed back to $115,227, up 2.9% on the day, while Ethereum (ETH), BNB (BNB) and Solana (SOL), surged 8.4%, 12.2% and 8.7% respectively, according to CoinGecko.
"It is a logical thing. The flash crash was a temporary glitch and was caused by the cascading liquidations, and everyone was expecting a rebound," Arjun Vijay, founder of crypto exchange Giottus, told Decrypt.
"During the rebound, the riskiest assets and those that crashed the most are expected to rebound the maximum,” he said. “So it is no surprise that people are betting on meme coins, and this is leading to a virtuous cycle."
Friday’s crypto crash
The crash was triggered by President Trump's announcement of a "massive increase" in tariffs on Chinese imports after canceling a planned meeting with Chinese President Xi Jinping, a move he acknowledged could be "potentially painful" for Americans.
On Sunday, the spokesperson for China's Ministry of Commerce noted that "for a long time, the U.S. has been overstretching the concept of national security, abusing export control, taking discriminatory actions against China."
However, tensions appeared to ease over the weekend, with Trump posting on Truth Social Sunday that the U.S. "wants to help China, not hurt it.” Nevertheless, users of prediction market Myriad put just a 13.5% chance of him visiting China before the end of the year.
"For the medium to long run, this de-risk plunge is actually healthy as it flushed out toxic leverage in the market: short-term pain, long-term gain," Charmaine Tam, head of OTC sales and trading at Hex Trust, told Decrypt, noting how "altcoins suffered the most during the whipsaw last Friday,"
Tam noted how “institutional plumbing held firm” even amid the sell-off, with Bitcoin’s dominance “failing to reclaim 60.5%”—a sign, she said, that altcoins may lead as liquidity recovers.
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