Volatility refers to the rapid and unpredictable price fluctuations that characterise memecoins, a category of cryptocurrencies driven primarily by internet culture, social media hype, and speculative trading rather than fundamental value. Unlike traditional assets, memecoins like Dogecoin (DOGE), Shiba Inu (SHIB), and newer tokens often experience extreme price swings within short periods, sometimes gaining or losing 50% or more in a single day. This volatility stems from several factors:

1. Speculative Trading – Memecoins attract retail investors seeking quick profits, leading to FOMO (Fear of Missing Out) and panic selling.

2. Social Media Influence – Endorsements or criticism from celebrities (e.g., Elon Musk) and viral trends can trigger sudden price surges or crashes.

3. Low Liquidity – Many memecoins have shallow markets, meaning even modest trades can cause drastic price changes.

4. Lack of Utility – With minimal real-world use cases, memecoins rely purely on market sentiment, making them highly unstable.

5. Market Manipulation – "Pump-and-dump" schemes, where large holders artificially inflate prices before selling off, exacerbate volatility.

While volatility presents high-risk, high-reward opportunities for traders, it also makes memecoins unreliable as long-term investments. Investors should exercise caution, as the same hype that drives prices up can vanish overnight, leading to steep losses. Understanding this volatility is crucial for anyone engaging with memecoins.