In recent months, the crypto market has been both entertained and stunned by the unexpected rally of memecoins. From the already established Dogecoin and Shiba Inu to newcomers PEPE, these digital assets have attracted huge interest and speculative investment due to their strong community support and social dominance. However, recent market developments have thrown a wet blanket over the meme lot as these crypto tokens have experienced a sharp drop in value, suggesting diminished investor interest.
A pump-and-dump game on the Memecoin market?
Pepecoin (PEPE), the once-popular memecoin that made overnight millionaires out of several investors, has taken a dizzying plunge, dropping more than 55% in just four days.
Launched just three weeks earlier, PEPE had quickly climbed to the 45th position of the largest cryptocurrencies by market capitalization. However, fortunes began to turn on Friday, May 5, shortly after it was listed on Binance, the world’s leading crypto exchange.
PEPE’s dramatic fall in value has had a significant impact on its market cap. While it started with less than a million dollars at its mid-April launch, it had ballooned to more than $1.2 billion by Friday. Now the asset’s market cap stands at just over $764 million, a loss of more than $400 million in just a few days.
The recent nosedive in PEPE’s price may be exacerbated by traders cashing in on profits and adopting alternative trading strategies in light of several PEPE perpetual futures contracts released over the past week. Memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB), which share a similar history to PEPE, have experienced significant declines from their all-time highs as the enthusiasm around them wanes.
In addition, PEPE’s lack of inherent utility and intrinsic value has led to suspicions that the asset’s meteoric rise is only temporary, leading investors to question its long-term viability and whether it was a pump-and-dump game.
PEPE’s Refusal to Influence Other Memecoins?
After PEPE’s downturn, whale investors sold their memecoins to leave with a profit. Whale Alert, the leading cryptocurrency tracking service, has revealed that an unidentified whale has moved a whopping 299,999,999 Dogecoin to the Binance exchange.
Another crypto tracking account, DogeWhaleAlert, detected several other DOGE transactions that cumulatively exceeded the aforementioned transfer. Notably, two of these transfers were also destined for Binance. These transactions coincided with a small drop in Dogecoin’s value over the past 24 hours.
The PEPE coin price is currently trading at $0.00000194 which falls below the EMA-20 trendline on the 4-hour price chart. After PEPE’s dramatic fall, SHIB’s price has also fallen as it trades at $0.00000882.
If bulls don’t get control immediately, the PEPE coin could break below the crucial $0.0000015 support level, which will cause a severe downturn for other memecoins as well. According to popular crypto analyst Benjamin Cowen, many memecoins in circulation today could be forgotten within eight months as people lose interest and stop caring.