In recent months, the crypto market has been both entertained and bewildered by the unexpected rally of memecoins. From the already-established Dogecoin and Shiba Inu to newcomers PEPE, these digital assets have attracted massive interest and speculative investments due to their strong community support and social dominance. However, recent market developments have thrown a wet blanket on the meme party, as these crypto tokens have experienced a steep drop in value, hinting at a declined interest from investors.
A Pump and Dump Game in the Memecoin Market?
Pepecoin (PEPE), the once-trending memecoin that made overnight millionaires out of several investors, has taken a staggering dive, plummeting over 55% within just four days.
Launched merely three weeks prior, PEPE had rapidly ascended to the 45th position among the largest cryptocurrencies by market capitalization. However, its fortunes began to reverse on Friday, May 5, shortly after being listed on Binance—the world’s leading crypto exchange.
PEPE’s dramatic drop in value has had a significant impact on its market cap. While it began at under a million dollars upon its mid-Apr-launch, it had swelled to over $1.2 billion by Friday. Now, the asset’s market cap stands at slightly over $764 million, shedding more than $400 million in just a few days.
The recent nosedive in PEPE’s price may be exacerbated by traders cashing in on their gains and adopting alternative trading strategies in light of the various PEPE perpetual futures contracts released within the past week. Memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB), which share similar histories with PEPE, have experienced considerable declines from their all-time highs as enthusiasm surrounding them wanes.
Furthermore, PEPE’s absence of inherent utility and intrinsic value has fueled suspicions that the asset’s meteoric rise is merely temporary, causing investors to question its long-term viability and whether it was a pump-and-dump game.
PEPE’s Decline to Impact Other Memecoins?
Following PEPE’s decline, whale investors have been selling their memecoins to exit in profit. Leading cryptocurrency tracking service Whale Alert has revealed that an unidentified whale moved a staggering 299,999,999 Dogecoin to the Binance exchange.
Another crypto tracking account, DogeWhaleAlert, detected several other DOGE transactions cumulatively exceeding the aforementioned transfer. Notably, two of these transfers were also destined for Binance. These transactions coincided with a minor decline in Dogecoin’s value over the past 24 hours.
PEPE coin price is currently trading at $0.00000194, falling below the EMA-20 trend line on the 4-hour price chart. Following PEPE’s dramatic fall, SHIB’s price has also declined as it trades at $0.00000882.
If bulls don’t gain control immediately, the PEPE coin may break below the crucial support level at $0.0000015, which will begin a severe downturn for other memecoins too. According to popular crypto analyst Benjamin Cowen, many memecoins in circulation today might be forgotten in eight months as people lose interest and stop caring about them.