PEPE Leads Memecoin Gains As Altcoins Rally After Holidays Crypto Markets

TLDR

Table of Contents

PEPE rose more than 30 percent, leading memecoin gains during the post holiday market rebound.
Dogecoin, Shiba Inu, and BONK recorded double digit gains alongside other meme tokens.
AI tokens and new protocol coins also advanced as traders rotated into higher risk assets.
Bitcoin and Ethereum posted modest gains, while miners and crypto stocks traded higher.

PEPE surged at the start of the new year as traders returned after the holiday break. The memecoin led a wider altcoin rally that lifted risk assets across crypto markets. Strong gains in smaller tokens appeared as investors rotated early into higher volatility assets. Market data showed renewed interest in memecoins, AI tokens, and crypto-linked stocks during the first trading sessions of January.

PEPE gained over 30 percent during the session, making it the strongest performer among major memecoins. The token’s market capitalization stood near $2.5 billion during the rally. Trading volumes increased, signaling short-term positioning by market participants.

Memecoins are starting off the year strong with the sector significantly outperforming the rest of the crypto markets.$PEPE is up +50% since the start of the year, and interestingly the move up began right around the yearly open. pic.twitter.com/HIleaZ0W8G
— Satoshi Stacker (@StackerSatoshi) January 3, 2026

Other memecoins followed the same trend as broader risk appetite returned. Dogecoin rose about 12 percent, while Shiba Inu and BONK advanced near 13 percent. FLOKI, Dogwifhat, and fartcoin also posted double-digit gains. Solana-based POPCAT and Ethereum-based MOG climbed close to 20 percent each.

PEPE Outperforms as Memecoins Rebound

Analysts linked the memecoin surge to seasonal trading patterns rather than project-specific developments. VanEck Head of Research Matt Sigel said assets that lag late in the year often rebound in January. “Small and illiquid assets tend to bounce more in January on average,” Sigel said.

Memecoins were among the most pressured assets toward the end of 2025. Jake Kennis, senior research analyst at Nansen, noted sharp declines before the rebound. PEPE and Dogecoin were down nearly 80% from their all-time highs. Kennis said traders may now be positioning after extended consolidation periods.

Early-Year Rotations Drive Altcoin Activity

Market participants pointed to capital rotation as a key factor behind the rally. Several analysts noted that risk appetite often increases early in the year. This pattern can favor smaller tokens that underperformed in previous months.

Timot Lamarre, Director of Market Research at Unchained, described shifts seen during 2025. “In 2025, money that typically would find its way into Bitcoin found its way into other assets,” Lamarre said. He added that funds moved toward AI companies and Bitcoin treasury firms instead.

Despite supportive factors such as regulatory momentum and growing ETF adoption, crypto markets lagged traditional assets in 2025. This set the stage for renewed interest in higher-risk segments at the start of 2026.

AI Tokens and New Protocols Also Gain

The rally extended beyond memecoins into other altcoin sectors. AI-related tokens recorded broad gains during the same trading session. ElizaOS led the category with a rise of more than 50 percent. Render, Virtuals, and Bittensor advanced between 8 percent and 13 percent.

Smaller tokens tied to newer protocols also moved higher. Monad’s MON rose more than 15 percent, while Plasma’s XPL gained over 13 percent. These moves occurred without major announcements from the projects.

Sigel also pointed to broader technology sentiment supporting the market. He cited Hong Kong IPO activity and China expanding subsidies for AI hardware. This environment, he said, has supported crypto-linked technology assets.

Bitcoin, Ethereum, and Crypto Stocks Lag Behind

Large-cap cryptocurrencies posted more modest gains during the rally. Bitcoin rose about 2.4 percent, while Ethereum increased roughly 4.5 percent. Solana advanced close to 5 percent, lagging smaller and more volatile tokens.

Crypto-related stocks also moved higher but showed mixed performance. Digital asset infrastructure companies led gains near 20%. Bitcoin treasury firm Semler Scientific rose about 13.8 percent. Ether-focused firm BitMine gained roughly 12.5 percent.

Bitcoin mining companies recorded broad advances. Cleanspark, IREN, and Riot gained more than 11 percent. Core Scientific, Cipher Mining, MARA, and Terawolf posted smaller increases. Sigel noted that January performance often draws market attention. “There’s research that positive January returns correlate with higher average returns later,” he said.