The new memecoin Pepe (PEPE) is up over 2,000% since its launch a few weeks ago and is currently entering a sharp correction.
On May 3, the PEPE price fell to an intraday low of $0.00000084, about 35% below its all-time high of $0.00000138 set two days earlier. As a result of the correction, its market capitalization dropped by almost $80 million, thereby knocking it out of the top 100 cryptocurrencies list.
Price performance of PEPE since listing | Source: trade view
The combination of technical and fundamental indicators point to a further downward trend in the price of PEPE.
investor interest reduce retail
As the price fell, PEPE’s daily trading volume on centralized exchanges (CEX) and decentralized exchanges (DEX) decreased.The same thing happens when searching for the keyword “Pepe Coin” Googlethe score dropped from 100 to 7 in just one day, indicating that the retail hype has faded over the past 48 hours.
level of interest Keywords Pepe Coin | Source: google trends
Activity in Liquidity Pools
PEPE has attracted interest on the Uniswap decentralized exchange, becoming one of the most researched coins on the Nansen data platform.
According to Nansen data, Uniswap’s V2 and V3 liquidity pool contracts for PEPE-WETH are the most active liquidity pool contracts in the past 7 days, with more than 82,750 and 72,950 transactions respectively.
The two liquidity pools collected nearly $900,000 in cumulative fees over the same period. The only two pools with more cumulative fees are the USDC-WETH and WETH-WETH pools, highlighting the recent obsession with PEPE.
Despite the recent increase in liquidity pool activity, traders over the weekend were annoyed by the lack of liquidity, which led to sharp declines for those trying to convert large amounts of PEPE into fiat currencies such as ETH and other currencies.
oldpepe the elephant pfestive worrying
According to data tracked by CoinCarp.com, the 100 richest PEPE addresses (aka “whales”) control 45% of the token’s circulating supply.
Leading PEPE Dealers | Source: CoinCarp.com
While those 100 addresses may belong to 100 different individuals, it is also possible for one entity to control more than one address. This reduces the number of actual whales commenting on the future price trend of PEPE, increasing the risk of manipulation.
For example, Lookonchain disclosed five addresses allegedly connected to Pepe’s team that made $1.23 million in profits in a thinly liquid market. They bought 8.87 trillion PEPE at a low price on Uniswap, and sold more than 90% of their holdings at a higher price.
PEPE buying and selling chart | Source: Lookonchain
Some of the top PEPE holders are centralized exchanges. However, according to data tracked by analyst 008.eth, non-exchange PEPE whales have recently reduced their positions, suggesting profit-taking coincides with an ongoing price correction.
PEPE coming soon20% adjustment?
PEPE is rising without being driven by any particular fundamental indicator, and evidence of a decline in the number of whales controlling the upward trend may offset the gains made in the short term. Technical analysis also holds the same view.
For example, the 4-hour chart shows that PEPE/USDT has made higher highs, but the Relative Strength Index (RSI) has been making lower highs since April 30. In other words, the bearish divergence suggests that PEPE’s bullish momentum may be weakening in the short term.
Moreover, PEPE is approaching the 50-4H Exponential Moving Average (EMA 50-4H, red waves) around $0.00004741, which represents a 20% drop from the current price.
A further break below the red wave could lead the coin to test the $0.0000002-$0.00000017 range as the next downside target.
Of course, the PEPE token is just up and running, so lacks a complete price history to predict future movements. Additionally, the memecoin industry is known for its high volatility and large price swings.
For example, DOGE is up 7,000% since 2020, thanks to strong support from billionaire investor Elon Musk.
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As reported by Cointelegraph