Earlier in May, the market capitalization of Pepe (PEPE), a cryptocurrency inspired by the popular internet meme Pepe the Frog, had soared to $1.8 billion. Two weeks later, PEPE price has come crashing to nearly $665 million, down 65%. Let's take a look at the main reasons why.
Pepe mania winners dump
PEPE whales appear to have been largely responsible for the price drop, according to data tracked by Wuligy, an on-chain analyst at Dune Analytics.
Notably, the top fifteen addresses with the highest earnings and returns and those holding a significant amount of PEPE tokens around its market peak have dumped most of their holdings in recent weeks.
Some whales have even sold 100% of their PEPE reserves during the crash, as shown below.
Simultaneously, PEPE's hourly transactions and volumes have dropped substantially when compared to their respective peaks on May 5, indicating declining trading activity among whales and fishes alike.
On a brighter note, PEPE's daily holder count has flatlined, if not fallen, after April's sharp increase from around 100 to over 100,000. As of May 23, it was over 115,000, suggesting that new users are joining despite the price decline.
However, some of these addresses may belong to existing PEPE holders or represent exchange wallets, given PEPE's listing across multiple crypto exchanges since launch, with the latest being Bitfinex.
If you’re a fan of memecoins, then don’t miss out on $PEPE - the crypto created in tribute of Pepe the Frog
— Bitfinex (@bitfinex) May 22, 2023
Deposits are now open at Bitfinex, find out when you can start trading!https://t.co/GMDLOcsvcX pic.twitter.com/6Kb0YiaAhf
PEPE price bounce next?
PEPE price is now at a technical support confluence level, suggesting that a modest bounce is in now in play.
Related: Pepe would be ashamed of PEPE investors
The confluence comprises an ascending trendline, a 50-4H exponential moving average (50-4H EMA; the red wave), and a Fibonacci retracement line near $0.00000146.
A rebound attempt from the said support raises PEPE's potential of rising toward $0.00000190, up 20% from current price levels.
Conversely, a decisive close below the support confluence would position PEPE/USD price for a decline to $0.00000083 by June, down 45% from current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.