Why is it difficult for Meme Coin to break a market value of 50,000 USD? This market is draining retail investors' funds

Written by: StarPlatinum_

Compiled by: AididiaoJP, Foresight News

I have been trading meme coins for three years. What frustrates me the most about this market right now is that it has become very difficult to determine whether the buying pressure for a token is generated by real buyers or if it is an illusion created by the project team before you even see it.

This scenario has repeated itself hundreds of times. A new token launches on Pumpfun, starts to gain some traction, the number of holders increases, the trading volume looks decent, a few familiar faces start discussing it, and suddenly the market cap reaches $50,000, only to crash to zero. Sometimes it can spike to $100,000, $200,000, or occasionally $300,000, but the outcome is usually the same: the price collapses, people start complaining about the lack of buyers, and a few minutes later, another token emerges.

I used to think that many projects fail due to insufficient demand. But there is another explanation that I believe more people should be aware of: a significant portion of the community hype you see is fake from the very beginning.

In 2024, the rules have changed

When meme coins weren't so competitive, getting in early did have its advantages. You discover something interesting, buy it before anyone else, wait for the narrative to spread, and then hope to sell to stronger demand. There are certainly risks, but at least the people buying alongside you have a reasonable probability of making independent decisions.

Today is different. A token can appear to have hundreds of holders and active trading, but in reality, most of the supply is held by the same group. The worst part is that all of this can happen before ordinary traders even notice the token.

This is where "bundling" comes into play. With tools like Jito, token creators can coordinate multiple wallets to buy simultaneously, locking in a significant portion of the supply at the earliest price. When you first look at the holder list, these wallets may seem unrelated. But from a funding perspective, they could belong to the same person.

Imagine this: launching a token and using ten wallets to acquire 40% of the supply. Those looking at the holding distribution would think that ten independent traders bought in early. In reality, it is one entity controlling ten wallets.

The numbers are worse than I expected

Bitquery analyzed 8.2 million Pumpfun projects between October 2025 and October 2026, and the conclusions are grim.

21% of Pumpfun projects had wallets associated with developers participating in issuance bundling, with a median holding supply of 10%. During the study period, developers and their associated bundled wallets collectively profited $579 million. More critically, among the tokens studied, 65% of developers started selling within the first minute of launch.

Think about that number. Most retail investors haven't even figured out what they bought, and some are already exiting.

Bitquery recorded an extreme case from June 2026. A developer launched a token with a very small initial buy. Four wallets in the same Jito bundle spent $6,000 to acquire 79% of the supply. The token "graduated" almost immediately, and in the next 18 minutes, 1,138 wallets flooded in. Meanwhile, five early wallets had already sold their holdings for $121,000—having spent a total of $11,000, achieving an 11-fold return in 18 minutes. Someone had to pay for that money; spoiler alert: it was retail investors.

Even the trading volume is deceiving you

This is really frustrating. Trading volume used to be one of the first things I looked at when evaluating a token. A project with a trading volume relatively large compared to its market cap might indicate genuine interest. But what happens when creating fake trading volume becomes a service available to anyone?

According to another Bitquery survey, during its 30-day analysis, 58% of the $20.14 billion trading volume in Solana DEX pools was classified as non-genuine trading, approximately $11.77 billion. A significant portion came from extremely simple operations: coordinating the buying and selling of the same token in the same transaction. In other words, the data that appears to show people trading may just be bots repeatedly buying and selling.

Add to that the artificially manipulated number of holders. Developers can distribute a small amount of tokens across dozens of wallets, creating repeated transactions that make the project appear much more popular than it actually is. Then comes the marketing—this is a play you already understand. A few Telegram groups start mentioning it, some accounts on X post charts, a certain KOL shouts out a recommendation, and by the time you see it, it's already too late; the game is over. However, all of this is likely coordinated by the same group waiting to sell.

This is also why I believe so many tokens die at a $50,000 market cap.

The KOL shouting recommendations may be offloading

I've been on crypto Twitter long enough to know that not everyone promoting a token is involved in coordinating operations. Some genuinely believe in what they are buying, some just make wrong judgments, and some, yes, are getting paid. The problem is that these three types of people may look exactly the same to those scrolling through Twitter.

If you start selling immediately after posting a recommendation, those who trust your recommendation are effectively providing liquidity for your exit. Imagine doing this repeatedly: different tokens, different codes, different narratives, but the outcome is the same. This is why I believe looking at a person's trading history is becoming as important as looking at the token itself. A KOL with a profitable entry record doesn't necessarily mean they are good at spotting opportunities. Sometimes it just means they got in before the audience they are about to lead to that token. No one talks about who is selling when recommendations are shouted.

So how do you protect yourself?

I don't think the solution is to stop trading all tokens with bundling. Not every bundling is malicious. Some teams use coordinated issuance to manage sniper behavior, and independent snipers may buy in the first block, unrelated to the developers. The key difference lies in what those wallets do afterward.

Personally, I believe traders need to spend more time figuring out who holds the supply. Tools like Bubblemaps, Trench Radar, and Solscan can help you check early buyers, wallet associations, and token distributions. If a group of wallets bought a significant proportion of the supply in the issuance block, I want to know if they still hold it. If several top holders' SOL comes from the same source, I want to understand why. If a token has limited liquidity but suddenly shows abnormal trading volume, I want to know if that is independent buying and selling. If someone is heavily promoting it, I want to know whether their wallets are accumulating or distributing.

But there is another problem: the manipulators are also improving; they will adapt. They use different funding sources, spread purchases across multiple blocks, recycle wallets, and find new ways to make coordinated behavior look like natural behavior. This means that tools to help retail investors identify manipulation will never be perfect. You still have to think for yourself.

Deeper issues

Solidus Labs estimates that during its study period, 98.6% of Pumpfun tokens exhibited characteristics of price manipulation for offloading. I believe this is one of the reasons the current market has become so different. People keep asking: where is the next PNUT? Where is the next token that goes from a few thousand dollars to hundreds of millions? Why does it seem like nothing can sustain a narrative?

Perhaps part of the answer lies in the fact that this industry has turned into a business—pulling liquidity out before the narrative takes shape. Genuine communities are increasingly struggling to compete with another group of people: their entire business model is to create the illusion of a "community." I believe this issue is much larger than many people realize.

What this means

I still believe there are opportunities within meme coins; otherwise, I wouldn't spend time tracking this market. But I also think that the days of blindly buying anything that starts to heat up and expecting the market to reward you are fading. When you buy, others may already hold half the supply; being "early" is not enough; you now need to understand the structure of the trade.

Once again, I don't think meme coins will disappear. But the continuous draining of the market is slowly destroying the interesting conditions it once had. Think about what this market used to be like; it's genuinely quite sad now.