Key Takeaways:
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Binance’s new “Meme Rush” launchpad encourages fair launches but sparked a sell-off as traders await new launches.
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A single wallet controlled large amounts of tokens, fueling fears of manipulation and sharp price drops.
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Low liquidity and excessive volumes increased the memecoin sell-off across the BNB chain ecosystem.
Several memecoins on the BNB chain fell more than 30% on Thursday after posting strong gains earlier in the week. The sell-off came as BNB (BNB) itself saw its first one-day price drop of $100, falling to $1,246 at the time of writing. Is this the end of the BNB chain memecoin frenzy – and were there early signs before the crash?
Most of the affected memecoins had market caps of less than $50 million, although some stood out from the downturn, including PALU, GIGGLE, 4 and Binance Life (币安人生). Some analysts suspect that sentiment has changed after Binance announced on Thursday the launch of its new platform Meme Rush, a partnership with Four.Meme that is available exclusively to Binance wallet users.
Beyond the standard bonding curve model and listing on DEXs once a fully diluted valuation of $1 million is reached, Meme Rush will introduce potential offerings on Binance Alpha, giving the entire Binance user base access to new tokens. The initiative aims to curb fake trading volumes through KYC requirements and fair launch mechanisms, although the move has drawn some criticism.
Perhaps the real reason for memecoins’ success lies in their lack of regulation and oversight. Still, traders have likely sold existing BNB chain memecoins in anticipation of migrating to the newly announced platform.
BNB chain memecoins are affected by high concentration and fake volumes
Despite profit-taking and the urge to rotate capital ahead of the next wave of memecoin launches, it took a few more factors to trigger a 40% decline in just a few hours. Excessive concentration among top wallets, relatively low liquidity, and artificially inflated volumes were likely the main reasons for the sharp downturn in BNB meme season.
The user also noticed that some memecoins had less than 2.5% of their total supply deposited in liquidity pools.
Unlike traditional bid-ask order books, most DEXs operate through automated market makers based on liquidity pools, a challenge that is not unique to BNB Chain. When only a small portion of a token’s supply is tied up in liquidity, inflows can drive market capitalization sharply higher, but the same structure accelerates price crashes once sell orders intensify.
Insider trading and market manipulation concerns
Even more worrying, the X account Bubblemaps observed that a single wallet purchased around $100,000 worth of PALU just minutes before former Binance co-founder Changpeng “CZ” Zhao posted an image with the memecoin’s logo. The timing fueled speculation about coordinated trading activity. Bubblemaps also found that “insiders” held an unusually large stake in certain projects, such as YEPE, where insiders reportedly controlled around 60% of the supply.
The fact that BNB itself fell 9.5% from its all-time high of $1,357 on Tuesday further accelerated the correction across the memecoin market. Ultimately, the sustainability of the BNB Chain memecoin season could depend on whether BNB can reclaim the $1,300 mark and whether Binance Wallet’s Launchpad initiative proves successful.
This article is for general information purposes and is not intended to constitute, and should not be construed as, legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
For more information on the BNB Chain memecoin market and Binance’s Meme Rush launchpad, visit https://cointelegraph.com/news/bnb-chain-memecoins-take-30-tumble-is-binance-s-meme-rush-over?utm_source=rss_feed&utm_medium=rss_tag_altcoin&utm_campaign=rss_partner_inbound
