New meme coin Pepe (PEPE) has entered a sharp corrective phase after surging more than 2,000% since its debut a few weeks ago.
On May 3, PEPE price fell to $0.00000089, down about 35% from its record high of $0.00000138 set two days ago. As a result of the correction, the market cap slipped nearly $80 million, knocking it out of the top 100 cryptocurrency index.
Pepe price history since launch. Source: CoinGecko
A mix of technical and fundamental indicators are pointing to further downside in PEPE price.
Retail interest is falling
Daily trading volume of PEPE fell on centralized (CEX) and decentralized exchanges (DEX) as prices fell. The same thing happened with Google Trends for the keyword “Pepe Coin”, whose score fell from 100 to 7 in one day, suggesting that retail hype has waned over the past 48 hours.
Interest rate for the Pepe Coin keyword. Source: Google Trends
The distribution of PEPE whales is worrying
The 100 richest PEPE addresses, also known as “whales”, control 45% of the token’s circulating supply, according to CoinCarp.com data.
Top PEPE distribution. Source: CoinCarp.com
Those 100 addresses could belong to 100 different people. But an entity can control more than one address, giving a limited number of whales more say over the direction of future PEPE price action, increasing the risk of price manipulation.
For example, Lookonchain revealed that five addresses allegedly linked to the Pepe team made $1.23 million in profit in a thin market. They bought 8.87 trillion PEPE tokens at a low price and sold over 90% of their holdings at a higher price on Uniswap.
PEPE buying and selling scheme. Source: Lookonchain
Some of the top PEPE holders are centralized exchanges. But according to data from analyst 008.eth, unlisted PEPE whales have reduced positions of late, suggesting profit-taking that has coincided with the ongoing price correction.
20% PEPE correction ahead?
PEPE has rallied with no concrete fundamentals and evidence that fewer whales are in control of the uptrend could erase gains in the near term. technology match.
Related: 11 Classic Memes That Were Sold as NFTs
For example, the 4-hour chart shows that PEPE/USDT has made higher highs, but its Relative Strength Index (RSI) has made lower highs since April 30th. In other words, a bearish divergence that suggests that PEPE’s bullish momentum is likely to weaken in the short-term.
Furthermore, PEPE appears to be on the way to its 50-4 hour exponential moving average (50-4 hour EMA; the red wave) near $0.0000047410, down 20% from the current price level .
Another break below the red wave could see the token testing the $0.00000020-$0.00000017 range as the next downside target.
Of course, the PEPE token is new and thus lacks a proper price history to anticipate its future price movements. Additionally, meme coins are notorious for their high volatility and large price movements.
Dogecoin, for example, has gained 7,000% since 2020 thanks to vocal support from billionaire investor Elon Musk.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
