AI agent coins fell 12.08% in market cap, continuing a free fall that has affected almost all altcoins after the Donald Trump team issued its second memecoin over the weekend. According to data from Sosovalue, the market-wide decline affected DeFi, layer 1s, memes, and layer 2 tokens as they lost 6.94%, 6.99%, 7.53%, and 10.59%, respectively.

Although the market has now recovered, with TRUMP memecoin rising from $37 to $60, the market-wide decline, as reported by WuBlockchain, reflects the gut reaction of most investors to the launch of another memecoin by the president’s team.

There were already concerns from some market participants that TRUMP memecoin was sucking liquidity from the crypto market.

While no clear evidence backs this claim, CoinMarketCap data show that in the last 24 hours, only Bitcoin and Ethereum had more trading volume than TRUMP’s volume at $52.89 billion. It has outperformed Solana’s $36.13 billion and XRP’s $19.36 billion.

Interestingly, it also accounts for more than 50% of the trading volume for all memecoins within the 24-hour timeframe, a factor that likely contributed to major cap memes such as DOGE, SHIB, PEPE, and BONK all reporting between 9% and 2% declines.

Altcoins back on recovery path 

Most altcoins affected by the market meltdown have now recovered and are back in the green, contributing to a 3% growth in total crypto market cap over the last 24 hours. The recovery is likely linked to Bitcoin’s surge to a new all-time high of $109,000 amidst the strongly positive expectations about what the Trump administration could do for crypto.

While there have been concerns regarding the incoming president’s team issuing memecoins, many believe that it is a sign of Trump’s pro-crypto stance. There are also reports that he could sign crypto-friendly executive orders once he is sworn into office.

Major cap altcoins such as ETH, XRP, ADA, TRX, LINK, and AVAX have all seen gains in the last 24 hours, varying from over 12% for LINK to more than 3% for TRX, according to CoinMarketCap. However, SOL remains down about 5%, which is not surprising given that it has reached a new peak price of $294.33 in the last 24 hours.

Analysts say Trump could launch altcoin season 

With altcoins recovering, analysts believe that Trump’s memecoin launches are a sign of the positive gains that the crypto industry will experience in the Trump era. Experts at digital assets firm QCP Capital noted that this might be the catalyst for the much-anticipated altcoin season.

They wrote:

“The global reach and speed at which $TRUMP surged signal a paradigm shift in capital formation as crypto becomes increasingly mainstream. Could this be the catalyst that drives the anticipated altcoin season?”

The analysts singled out Solana, noting that TRUMP’s launch on the blockchain is a major endorsement of the network. They also noted that it increases the odds of a spot SOL exchange-traded fund (ETF) being approved much earlier than many expected.

While many people have focused on the impact of the TRUMP memecoin attracting retail investors to crypto, QCP analysts believe it is also a message to institutions about the president’s position on crypto. They note that everyone is now waiting for clear pro-crypto policies to determine their next steps.

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