Meme coins, led by Solana-based Dogwifhat, experienced a significant surge, outpacing DeFi and exchange tokens.
Bets on DOGE-tracked futures hit a record $2 billion, prompting trading firms to caution against potential pullbacks amid signs of exhaustion in Bitcoin and Ether price movements.
Dogwifhat (WIF) and other meme coins, notably floki (FLOKI), witnessed a remarkable surge, fueled by speculation surrounding DOGE's potential use in an upcoming payment service by social app X, although official confirmation from the company is awaited.
The surge in DOGE-tracked futures bets to a record $2 billion signifies anticipation of future price volatility, biased towards long positions.
With WIF surpassing pepecoin (PEPE) to become the third-largest meme token by market capitalization and breaching the $4 milestone on Thursday, dog-themed tokens gained traction as a beta play to dogecoin.
Despite the meme coin rally, some trading firms expressed caution, citing signs of exhaustion in Bitcoin and Ether's price rally. Singapore-based QCP Capital highlighted downside-skewed ETH risk reversals and elevated funding and forwards, suggesting speculators' reluctance to unwind leveraged long positions.
While maintaining a bullish outlook, the firm emphasized prudence regarding leverage amid the market's exponential Q1 rally.