On May 4, 2025, the memecoin market, which had recently been incredibly hot, showed signs that it was starting to cool down.
Analytics from blockchain showed that the type of investors often referred to as “smart money” had largely stopped investing in the market and were instead pulling their funds out. Most of the mainstay memecoins had seen fresh capital flows largely dry up, and it looked like those nachos had mostly been eaten.
Net Outflows Reflect Waning Confidence Among Informed Traders
Chain data shows that smart money wallets are inflowing into memecoins to the tune of $1.08 million for the day. But that’s nothing compared to the outflow, which is hitting $1.83 million. And the net volume, which is the difference between those two numbers, is coming in at a clear and pronounced negative $745,000. It’s a situation that is making meme tokens across the board look like they’re in for a rough ride, considering that the total volume of all the tokens we track on an almost daily basis is $2.91 million.
Generally, when we see net outflows like this, it’s a risk-off signal. Recent outflows, however, are noteworthy not just for their size, but also for the kind of actors that are behind them. These are outflows that have been driven by what are commonly referred to as ‘smart money’ entities. Smart money has historically done a pretty good job of calling market tops and bottoms. The actor base behind these recent outflows suggests that this is more than just a ‘buy the dip’ opportunity.
Selective Inflows Suggest Pockets of Speculative Optimism
In spite of the general downtrend, several tokens managed to attract positive inflows, which signifies that the specific projects still hold speculative interest for some investors. chief among them is the token $HOUSE, which saw $163,000 in ‘smart money’ entering the token just this past week. While there is not much information available about the token, low-market cap tokens like this one can be easily pumped by traders, mainly because any upward movement can be interpreted as a sign that the token is on the verge of an explosion.
Following this was $TROLL, which managed to pull in $107,000 in high-quality investment. This number implies that, even though the token’s narrative as a meme remains robust, traders are being careful and are not ready to make any big investment bets just yet. Other big winners in terms of inflow included $WIF, which got $75,000; $HOSICO, which netted $51,000; and $BONK, which added $39,000. Each of these tokens has a steady if not quite large, presence in the memecoin ecosystem, but the figures suggest that they may be benefitting from some microtrends or, at minimum, are getting some decent social media exposure.
The inflow amounts that are relatively small, however, indicate a restrained appetite even for favored tokens. This suggests that most ‘smart money’ participants are currently avoiding significant risk exposure in memecoins.
Outflows Signal Profit-Taking and Defensive Positioning
Substantial outflows were recorded across several popular tokens. The largest came from $GORK, which saw $458,000 in smart money leave its ecosystem. Heavy exiting from $GORK could be a sign of large holders taking profits after previous rallies, or perhaps concerns about liquidity and sustainability in the near term.
A sizable outflow of capital has also occurred in the case of FARTCOIN. From March 23 to 24, 2023, FARTCOIN experienced roughly $276,000 in outflows from smart wallets. Meanwhile, the coin itself, which was created as a satire of the meme coin phenomenon, has seen extreme volatility in its prices. Its large outflow was another indication—not necessarily a surprise—of the current market situation wherein eager speculators are running far away from the very fringe of the cryptocurrency space.
Other significant tokens seeing outgoing cash included $ALCH (down $209,000), $SPX (down $130,000), and $MICHI (down $113,000). The parallel movement away from these tokens suggests a larger current among savvy traders of retreating to cash.
Recap: Smart money on chain activities in the memecoin market for 04/05/25
Yesterday, there was more outflow than inflow
Inflow: $1.08M
Outflow: $1.83M
Volume: $2.91M
Net Volume: -$745KThere was inflow into: $TROLL ($107K) $HOUSE ($163K) $HOSICO ($51K) $BONK ($39K) $WIF… pic.twitter.com/t1JDS8qd0Q
— Stalkchain (@StalkHQ) May 5, 2025
Looking Ahead: A Period of Consolidation?
Although daily data can be noisy, the sizeable net outflow seen on May 4 provides a clear picture. Institutional investors are pulling back, likely waiting for the next set of stronger, clearer signals before either resuming a long position in memecoins or, more likely, shorting them. Whether this pause by big investors marks the start of something larger or is just a temporary blip remains to be seen.
What is clear, however, is that the markets for memecoins—so often driven by the sentiment of communities, the hype of influencers, and the viral moments of the internet—are starting to feel the weight of more decision-making that is not just made by influencers and communities. Who is then making these decisions? What is predictable is that the decision makers are increasingly being depicted as “smart money”—those institutional and accredited investors who are supposed to be a lot smarter than the average retail trader walking around with a meme in one hand and a Twitter account in the other.
At the moment, everyone will be fixated on the prospect of whether or not this capital exodus carries on—and how the larger market takes in this shift in sentiment.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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