The cryptocurrency market has entered the new year with a sharp revival of risk appetite. Traders have piled back into meme‑driven tokens, sparking double‑digit gains across leading memecoins and a threefold jump in trading volumes within days. Data from CoinMarketCap shows the memecoin market capitalization climbing from $38 billion on December 29 2025 to over $47.9 billion on January 5 2026, up more than 23 percent in a week.
Dogecoin, Shiba Inu, and Pepe lead the recovery
Among the category’s major tokens, Dogecoin (DOGE) has gained more than 20 percent in seven days, while Shiba Inu (SHIB) has risen 19.9 percent. Pepe (PEPE) outperformed both with a 65 percent increase, marking one of the strongest weekly rallies among top‑50 digital assets.
Trading activity across the sector surged at the same pace. Daily transaction volume expanded from $2.17 billion on December 29 to $8.23 billion by Monday, data from CoinMarketCap shows. The renewed participation follows a steep decline through most of 2025, when memecoins collectively lost more than 65 percent and hit an annual low of $35 billion in market capitalization on December 19.
Analysts link rally to fading fear among retail investors
Market intelligence platform Santiment noted that the memecoin rally “began shortly after FUD was reaching its highest levels among retail traders, just a few days after Christmas.” The firm added that markets often respond contrarily to crowd sentiment and further commented, “As always, stay timely and capitalize on assets that the retail crowd has written off the most.”
🐶📈 Meme coins, the most "speculative" of assets, have proceeded with their post-holiday run. The entire meme market cap is now above $45.3B, growing by +20.8% in just the past week.
— Santiment (@santimentfeed) January 4, 2026
📊 Notable 7-day gainers include:
🪙 $PEPE +54%
🪙 $USELESS +54%
🪙 $MOG +38%
🪙 $DOG +36%
🪙… pic.twitter.com/htdfiXLaLf
The shift appears to coincide with improving confidence across global digital asset markets. After the sharp year‑end drop, many retail traders and short‑term funds have re‑entered the space, suggesting an early‑year reset in positioning and risk exposure.
Bitcoin’s stability and new liquidity may have aided the move
While memecoins have posted double‑digit gains, Bitcoin (BTC) has also maintained upward momentum. Prices moved about 5 percent higher over the same week, trading near $92,335 on Monday, according to TradingView data. Ether (ETH) rose 7.3 percent to roughly $3,168.
The broader crypto market capitalization increased from $2.97 trillion to $3.15 trillion, up around 5 percent. Analysts at Caladan, a market‑making firm, suggested that falling global inflation and renewed discussions on interest‑rate cuts could have fueled a broader risk rebound.
Traders see potential altcoin impact
A popular trader on X under the handle Wealthhmanger said that strong momentum in memecoins often precedes a wider altcoin rally.
“When we see this kind of strength in meme coins, other altcoins usually follow. And historically, the altcoin that benefits the most from meme momentum is Sol,” the trader said.
Solana (SOL) has a history of gaining traction during memecoin cycles, as its low‑cost network supports high trading activity linked to speculative tokens. The chain’s volumes rose in tandem with past meme hype periods, and early data indicates a similar pattern beginning to form.
Market sentiment turns neutral for the first time since October
According to CoinMarketCap’s Crypto Fear and Greed Index, investor sentiment has exited the “fear” zone and shifted to a neutral reading of 40, the first such result since October 2025. The improvement suggests that traders have regained partial confidence in the market, although analysts caution that memecoins remain highly volatile and prone to sharp reversals.
Even with the market’s upbeat mood, experts have advised restraint. A report from Santiment reminded traders that social‑driven surges can quickly unwind once momentum fades. The firm reiterated that the key to sustainable performance lies in liquidity and market participation, not sentiment alone.
Outlook for early 2026
Memecoins have recaptured traders’ attention at the start of 2026, contrasting with the deep sell‑off that defined late 2025. Whether this shift evolves into a longer bull run or remains an early‑year speculative burst will likely depend on macroeconomic drivers and Bitcoin’s ability to sustain its stability above $90,000.
For now, the numbers show clear evidence of renewed risk appetite. The first week’s gains have transformed a quiet holiday market into one of the most active trading periods in months, with Dogecoin, Shiba Inu, and Pepe leading the charge back into the spotlight.
Tanya Petrusenko
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