According to @AltcoinGordon, the meme coin market is experiencing significant volume dilution due to the proliferation of copycat tokens that launch immediately after an original coin gains traction. Instead of new buyers supporting the original meme coin, traders are increasingly launching their own competing tokens, which fragments trading volume and limits potential price growth for the initial project (source: @AltcoinGordon, June 7, 2025). This fragmentation can lead to reduced liquidity, increased volatility, and diminished returns for traders focusing on the original meme coin, making it essential for market participants to monitor token launches and evaluate liquidity trends before entering positions.

According to Milk Road (@MilkRoadDaily), an increase in the number of tokens leads to liquidity fragmentation. This results in reduced investment per token and consequently, a lower price lift across altcoins. The visual aid provided in their tweet illustrates this market dynamic clearly, emphasizing the challenges traders face in navigating an increasingly fragmented market.