Memecoins
Despite initial optimism, Meme Coin PEPE is facing a downturn, just like the rest of the crypto market
The price of PEPE, a meme-themed cryptocurrency, recently showed signs of an upward breakout from a descending wedge trend, sparking initial optimism among investors.
However, the rally abruptly came to a halt, leaving the coin vulnerable to a downturn.
Like all Meme coins, whales dictated the main market trend
If PEPE permanently loses its key support level at $0.00000624, it risks plunging to its lowest valuation in two months, wiping out all recent gains. On April 20, a burst of buying pressure materialized, marked by a prominent green candlestick on the trading charts. This enthusiastic buying frenzy, however, proved to be a double-edged sword.
It has attracted the attention of key stakeholders, often referred to as “whales,” within the cryptocurrency community. These whales, who hold large PEPE coin assets valued between $10,000 and $10 million, saw an opportunity to capitalize on the rising prices. As a result, a wave of sales ensued, with these whales liquidating over $120 million worth of PEPE in just ten days.
This massive sell-off by prominent holders effectively disrupted the coin’s nascent rally, highlighting the inherent volatility of meme coins. Unlike established cryptocurrencies with wider adoption and utility, meme coins are often susceptible to such manipulative tactics from large investors who can quickly shift market sentiment through strategic buying and selling .
In the realm of meme coin dynamics, large wallet holders typically act as liquidity providers, providing a certain degree of stability and support for the new currency. Their actions influence market movements and investor confidence.
Pepe Whale Holdings. Source: In the block
Mass sales, as evidenced by Meme Coin Pepe, can trigger a price drop
The decline in network growth further dampens PEPE’s overall prospects. Network growth, a metric that tracks the formation of new addresses on the blockchain, serves as an indicator of whether a cryptocurrency is gaining traction and attracting new users. Unfortunately, the growth of the PEPE network has been on a downward spiral in recent weeks, reaching its lowest level in two months. This decline suggests a lack of confidence not only from existing holders, but also from potential new investors who are hesitant to enter the market amid the prevailing uncertainty.
At the time of writing, PEPE trading price has fallen below the crucial support level of $0.00000633, settling at $0.00000618. This specific support level is of immense importance as it has served as a bulwark against falling prices on several occasions. A prolonged break of this level is generally interpreted as a bearish signal, foreshadowing a potentially prolonged period of price decline.
If the current wave of pessimism continues to dominate the market sentiment and dictates price action, PEPE could see a significant decline, potentially falling to $0.00000474. This price level represents a new test of lows not seen since early March, marking a substantial setback for the cryptocurrency.
Yet a glimmer of hope remains
If investors collectively manage to combat the prevailing negative sentiment and rally around PEPE, a turnaround is not out of reach. If PEPE manages to recover and hold $0.00000633 as a support level, it would effectively invalidate the bearish thesis and usher in a recovery phase.
This much-needed bounce could propel PEPE price to $0.00000700 and potentially even higher. A price recovery would not only restore investor confidence, but also stabilize PEPE’s market position, paving the way for future growth.