Analysis warns stock, memecoin narratives face selloff risk if trading slows

The stock and memecoin narratives driving the current market are fundamentally tied to trading volume and fee generation, and a drop in activity could remove the reward and price-recovery mechanisms that support token holding, potentially leading to selling, DeFi analyst Ignas said. Ignas said the model works as a virtuous cycle only while trading volume holds up. As an example, Coinbase’s quarterly trading volume fell about 74% to $145 billion from $547 billion in the fourth quarter of 2021 within a year, while trading in the memecoin market could decline by as much as 95%, Ignas said. Trading volumes on major decentralized exchanges, including Uniswap, are already trending lower, according to the analyst. He warned tokens such as ZCAT, STONK, INDEX and CASHCAT, which pay dividends or conduct burns using trading fees, could quickly lose their holding appeal once market participants lose interest in trading. Ignas added that simply extrapolating annual yields from current fee levels is highly risky and could trigger large-scale selling if volume collapses.