© 2026 The DeFi Report. All Rights Reserved.
Hello readers,
Most people trade memes based on “vibes.” But that’s not our game. That’s why we built a framework grounded in data, structure, and sanity — to make sense of one of the most reflexive corners of the market.
In this week’s report, we break down our systematic approach to analyzing memecoins.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.
Let’s go.
We like select memes simply because they have high beta to L1 assets. In essense, a small allocation to a meme like BONK (culture coin of the Solana ecosystem) can provide leverage on the L1 asset, without actually levering up (and taking liquidation risk).
Data: The DeFi Report
The signal we look for is when the 30-day (pink) shoots past the 90-day rolling beta (red - last happened on 4/1). The average 30-day and 60-day returns for BONK when this happens are 124% and 413% (median of 45% and 57%, respectively).
Data: The DeFi Report
We can see below that the regime shifts to risk on tend to happen fast, with BONK significantly outperforming over short bursts. This highlights the importance of timing your buys at the right inflection points (which we cover later in the report).
The bursts for BONK tend to coincide with moves of +5% for SOL within a week. Below are BONK’s average returns when this happens:
Avg. 1-week return of 26%, mean of 14%
Avg. 30-day return of 141%, mean of 11%
Avg. 60-day return of 512%, mean of 27%
In roughly 1/3 of the cases, BONK actually went down — highlighting that SOL performance does not guarantee BONK outperformance. With that said, most of these cases came before BONK’s explosive run in late ‘23.
Below, we can see that BONK is generally correlated to SOL. With that said, the correlation tends to break down during periods of BONK outperformance (Q4-’23, Q1-24, Q4-24, and this past April).
Data: The DeFi Report
BONK has a high beta to SOL over the 30, 60, and 90-day rolling periods, and a much higher beta from an absolute return perspective. This means BONK will typically go up/down significantly more than SOL — making it a high-risk/return asset.
We like to think of BONK as a levered bet on SOL, without the leverage (liquidation risk).
We are using BONK/SOL in the data, but the same conditions apply to other “blue-chip” memes and their relationship with L1 assets such as PEPE/ETH.
Shifting to onchain data analysis…
In addition to understanding the relative performance of a memecoin against its L1 pair, we also like to do some quantitative analysis using onchain data.
This tells us the relative quality and conviction of the holder base.
Below, we compare some of the top “blue chip” memes as a way to spot outliers.
Tokenholder growth provides a view into the recent popularity of the token and its virality.
Data: The DeFi Report
Helps us understand the conviction of the median and average holder of the token. Please note that some memecoin communities are more centrally managed than others. For these coins, you’ll notice much lower median holdings, which are a result of small airdrops allocated to many wallets at once.
Data: The DeFi Report
Again, this gives us a view into the holder base. We like to see a higher % of wallets holding > $1k as an indicator of interest and conviction.
This gives us some insight into the relative interest and conviction of large holders of the token in relation to total tokenholders.
Data: The DeFi Report, Dune
With this metric, we look at all wallets that ever held > $100k of the token that still hold greater than 50% of their peak units (to strip out noise from price action).
This helps us measure the conviction of the largest holders of the token.
Data: The DeFi Report, Dune
Here we filter all wallets that have ever had > $100k of the token while analyzing flows to/from DEXs from those wallets.
It gives us some insight into whether the largest holders are buying more of the token or exiting the project.
Data: The DeFi Report, Dune
In addition to the onchain data, we are only interested in memes with plenty of trading liquidity + a track record with multiple 50% + corrections.
Please keep in mind that our data is only looking at onchain activity. It does not include tokens held on centralized exchanges (roughly 20% for BONK).
For tokens trading on major exchanges, we like to look at open interest. Most of the open interest you see below is on Bybit.
Data: Glassnode, The DeFi Report
This is where the more crypto native instincts come into play in terms of monitoring social media activity and sentiment.
We like to filter memes by their potential “addressable interest.” For example, it has to be something that people can get behind globally (such as “flip the stock market” for SPX6900 — which sounds silly but has the potential to capture attention/create a movement).
What we look for:
A good narrative + community slogans that resonate. You don’t have to agree with it, you just have to see others adopting it.
Signs of strong belief, and a sense of belonging in the community (which turns holders into evangelists)
Signs of leadership and a sense of coordination (we’ve observed this in memecoins such as Bonk, SPX6900, and Giga)
Indications of embedded culture (the Pepe meme comes to mind)
One thing we’ve started to notice is that some communities are now promoting their projects on TikTok as a way to reach a younger cohort of potential crypto users.
The best meme communities tend to be outstanding marketers.
How do you know if you’re buying at a “fair value?”
We think the cleanest way to do that is to understand the relationship between the realized value (a proxy of the cost basis of all tokens in circulation) and the market value.
When the MVRV ratio dips below 1, it's telling us that holders (on average) are sitting on unrealized losses — an indication that we could be close to a local bottom, assuming bull market conditions will persist.
Bonk’s realized price is currently $.0002. At the time of writing, the token is trading at $.0000145— an indication that it could be a decent entry price.
*As noted, the realized price does not factor in the supply of the token on exchanges. Based on data from Solscan, we estimate that roughly 20% of Bonk’s supply is held on centralized exchanges (Binance, Robinhood, Coinbase, Kraken, etc).
Data: Glassnode, The DeFi Report
Another way to assess “fair value” in the absence of fundamentals is to look at momentum indicators.
The Relative Strength Index helps us understand if a token is currently underbought or oversold in terms of recent momentum.
An RSI approaching or dropping below 30 indicates “oversold” conditions, while a figure approaching or exceeding 70 indicates “overbought” conditions.
Data: The DeFi Report
Another way to look at recent momentum is by analyzing price in relation to key moving averages. We want to buy on strength, when the price is piercing through key support zones, but only if we have conviction on a 3-6 month time frame.
Data: The DeFi Report
Finally, analyzing Google trends and other social sentiment indicators can give us an idea of when it’s time to buy/sell.
Data: Google, The DeFi Report
We’d be remiss not to mention that memecoins are on the farthest end of the risk spectrum as possible. We know that BTC relies on liquidity conditions. Memecoins even more so. A favorable liquidity/economic environment in conjunction with “risk on” sentiment and the return of “animal spirits” is key if you’re going to allocate to memecoins.
Add it all up, and you get a framework covering:
Why we like select memes (beta) for a very small % of the portfolio
How to identify memes with strong “fundamentals” (onchain data)
How to measure “fair value” (MVRV)
When to buy (inflection points/macro/momentum)
When to sell (momentum/RSI)
Of course, this doesn’t make the framework foolproof. Nothing comes easy in investing. Outperformance can only come with elevated risk.
With that said, having a system in place should help you navigate the wild west of memecoins.
Take a Report.
And Stay Curious.
Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This research report is for general educational purposes only, is not individualized, and as such should not be construed as investment advice. The content contained in the report is derived from both publicly available information as well as proprietary data sources. All information presented and sources are believed to be reliable as of the date first published. Any opinions expressed in the report are based on the information cited herein as of the date of the publication. Although The DeFi Report and the author believe the information presented is substantially accurate in all material respects and does not omit to state material facts necessary to make the statements herein not misleading, all information and materials in the report are provided on an “as is” and “as available” basis, without warranty or condition of any kind either expressed or implied.