Pepecoin (PEPE), a memecoin that was once highly profitable, has experienced a sharp decline of more than 80% since reaching its record high. Now, technical indicators suggest that the memecoin could face even larger losses in the coming weeks or months.
The decline of Pepecoin began on August 24, when several rogue developers of the token changed the number of signatures required to move tokens from their multi-sig wallet. This change allowed them to send $16 million worth of PEPE to cryptocurrency exchanges, indicating their intent to sell. These actions raised suspicions of a “rug pull,” a scam in which developers manipulate the token to benefit themselves at the expense of investors. Some market analysts fear that the price of PEPE could crash to zero in 2023.
Previous rug pulls, such as the case of MULTI, the native token of Multichain’s cross-chain bridging protocol, resulted in a nearly 98% drop from its peak. Allegations that Multichain’s $125-million hack in July 2023 was part of a larger rug-pull scam contributed to this decline. Similarly, a crypto developer associated with the Encryption AI project committed a $2-million rug-pull fraud in July 2023, causing the Encryption AI token (0XENCRYPT) to crash 99% to an all-time low. These examples highlight the risks and consequences associated with rug pulls in the cryptocurrency market.
Technical analysis of the price of PEPE indicates the formation of a descending triangle pattern on the four-hour chart. A descending triangle is a bearish continuation pattern characterized by a falling trendline resistance and horizontal trendline support. Once the price decisively breaks below the support, it is expected to fall by the triangle’s maximum height. This suggests that PEPE’s price could potentially plummet to near-zero levels.
Despite the grim outlook, some PEPE investors have taken advantage of the token’s price decline to buy the dip. The supply held by entities with holdings between 10,000 and 100,000 PEPE tokens has significantly increased since August 27. These investors believe that the market can absorb any additional selling pressure from the token developers.
Looking at the price chart for PEPE, it has been trading near a recognized accumulation area around $0.00000085, which experienced a 120% price rally during the June-July 2023 session. This indicates that there is a higher chance of a market rebound at this level, especially considering PEPE’s oversold relative strength index (RSI). If PEPE’s price bounces at this level, the next target would be its 50-day exponential moving average (50-day EMA) near $0.00000121 in 2023, representing a 45% increase from the current price levels.
It is important to note that this article does not provide investment advice or recommendations. Investing in cryptocurrencies involves risks, and readers should conduct their own research and exercise caution when making investment decisions.
In conclusion, Pepecoin (PEPE) has experienced a significant decline and is at risk of even larger losses in the future. The recent actions of rogue developers and the formation of a descending triangle pattern are concerning indicators. However, there are optimistic investors who believe in the token’s potential and are buying the dip. The future of PEPE remains uncertain, and investors should approach it with caution.