Memecoins
PEPE’s correlation with Ethereum could play out this way for memecoin
- The data revealed that memecoin’s close ties to ETH could be a drag on growth.
- High FX outflows could help PEPE
Frog-themed memecoin Pepe [PEPE] was one of the few cryptocurrencies in the top 50 to record gains in the past 24 hours. At press time, PEPE was trading at a value of $0.000011, following a 3.35% increase in value on June 21.
However, AMBCrypto found that the uptrend may not last. One reason for this could be memecoin’s correlation with Ethereum [ETH]. According to IntoTheBlock, the correlation of PEPE with ETH was. 0.91 at press time.
ETH maintains close links with PEPE
The aforementioned figure was much higher than the correlation it shares with Bitcoin [BTC], which amounted to 0.60. Correlation values range from -1. at +1. When the value is close to -1, it means that prices are hardly moving in the same direction.
However, if the value is close to +1, it means that prices are heading towards the Same direction most of the time. And this was the case for ETH and PEPE.
But unlike PEPE, ETH has not appreciated in the charts. Instead, it moved sideways, trading at $3,502 at press time.
Source: In the block
If the altcoin price continues to consolidate or experiences a decline, the price of PEPE could trace Also. Beyond that, only a few memecoins also surged, meaning a lot of capital wasn’t flowing into the category to start a rally.
If anything, trading flows seemed to suggest that ETH might not be able to stop the uptrend. At press time, PEPE foreign exchange inflows stood at 845,000.
Memecoin is in a tough situation
Inflows measure the number of tokens sent into exchanges. When this number is high, it means that selling pressure could be intense and would likely cause prices to fall.
In contrast, Santiment data revealed that foreign exchange outflows were much higher, at 131.07 million. THE increase in output means that those who accumulate the token refrain from holding it on exchanges.
Instead, participants keep them in non-custodial wallets. If this activity continues, PEPE could neglect its close ties with ETH and the price could appreciate on the charts.
Source: Santiment
If so, the token’s value could reach $0.000013 in the near term. However, traders may not need to be cautious.
This, because of the asset distribution data. Consider this: addresses by securities revealed the 30-day change in the number of participants purchasing more tokens at a certain threshold.
In most cases, the retail cohort rarely impacts prices like large investors. At press time, the number of addresses holding between $1,000 million and $10 million in tokens had declined.
Considering the most recent liquidations Across the market, PEPE may now struggle to follow its former upward momentum.
Source: In the block
Realistic or not, here is Market capitalization of PEPE in terms of ETHs
If this happens, the $0.000013 prediction mentioned above could be invalidated. Therefore, the price of PEPE could move in lockstep with that of ETH and its price could remain around the $0.000011 area.