Pepe [PEPE]: As profit taking intensifies, will memecoin bid farewell to price rally
- PEPE’s price has dropped by over 50% in the past five days.
- Whales have dumped their PEPE bags as they exited previously held positions.
Five days after it clinched an all-time high (ATH) of $0.000004354, well-traded meme coin Pepe [PEPE] has shed over 50% of its value, data from CoinMarketCap revealed.
At the time of writing, the altcoin exchanged hands at $0.000001869 per PEPE token, having experienced a double-digit decline of 23% within the past 24 hours. However, while PEPE’s price declined, its trading volume rallied by 34% during the same period.
This sort of price/trading volume divergence is common in markets where buyers’ exhaustion has set in. Typically, available buyers of the asset concerned cannot drive any further price growth. Also, the required liquidity needed to drive up the asset’s value is absent as new demand wanes significantly.
PEPE suffers as investors run toward profits
An on-chain assessment of the alt’s exchange activity revealed a spike in the number of PEPE tokens sent to exchanges in the past few days. Growth in an asset’s supply on exchanges indicates a hike in profit-taking activity, which commonly drives down the value of such an asset.
According to on-chain data provider Santiment, since 4 May, PEPE’s supply on exchanges has jumped by over 3000%. As of this writing, 106.46 trillion PEPE tokens were housed within cryptocurrency exchanges. Five days ago, this was merely 3.12 trillion tokens.
Conversely, during the same period, the number of tokens outside exchanges declined by 18%, data from Santiment showed.
Further, a look at the alt’s supply distribution revealed a drop in its whale accumulation since it touched its ATH five days ago. The count of whales that hold over 100,000,000 PEPE tokens has since fallen by 12%.
This decline in whale holdings was indicative of general market sentiments that have trailed PEPE in the past few days. With most meme coins offering no intrinsic value, their temporary jump in value is often driven by hype and the desire of market players to make quick profits, after which the assets are abandoned.
Unfortunately, PEPE has been no different, and as Binance warned when it listed the asset:
“Memecoins are extremely high risk; please ensure that you exercise sufficient risk management. Please note that, as of the time of writing, PEPE has no token utility or value support mechanism.”