Pepecoin (PEPE), once a highly profitable memecoin, has plummeted more than 80% four months after hitting an all-time high. Now, technicals suggest that memcoin could be at risk of even greater losses in the weeks and months ahead.
Pepecoin faces trolling charges
On August 24, some rogue Pepecoin developers changed the number of signatures required to transfer coins from multisig wallets from five eighths to two eighths. They then sent $16 million worth of PEPE to cryptocurrency exchanges, indicating they wanted to sell.
Some market analysts see the moves as a harbinger of an upcoming “rug pull”, raising concerns that PEPE prices could drop to zero by 2023.
Another meme coin, another rug pull.
Honestly, what do you expect when you put your money into these scams?$ Pepe— Wolf (@IamCryptoWolf) August 26, 2023
Previous pulls, such as Multichain’s cross-chain bridging protocol’s native token MULTI, have dropped nearly 98% from their peak. Part of the decline is due to allegations that Multichain’s $125 million hack in July 2023 was part of a wider scam.
Likewise, in July 2023, a cryptocurrency developer associated with the Encryption AI project committed a $2 million scam. As a result, the encrypted AI token 0XENCRYPT plummeted 99% to an all-time low of $0.02.
The price of PEPE paints a deadly descending triangle
According to market analyst Nebraskangooner, the price of PEPE could soon drop to near zero due to the formation of a descending triangle on the four-hour chart.
A descending triangle in finance is a bearish continuation pattern characterized by the simultaneous formation of descending trendline resistance and horizontal trendline support. It resolves when the price breaks decisively below the support level and falls to the maximum height of the triangle.
The descending triangle is broken.
Zero this ponzi scheme pic.twitter.com/CJKaL2Agxx
— Nebraskangooner (@Nebraskangooner) August 28, 2023
This makes the bearish target of the PEPE descending triangle close to zero.
PEPE LOOKS TO BUY THE DIP
On the bright side, some PEPE investors are taking advantage of falling token prices as a bargain-hunting opportunity. Notably, the supply held by entities with balances between 10,000 and 100,000 PEPE tokens has increased significantly since August 27.
This accumulation is underway as Pepecoin hopefuls claim the market can absorb any further selling pressure from the coin’s developers.
“@pepecoineth devs once held 6% of PEPE and sold 16T tokens, equivalent to 4% of supply,” famous PEPE investor Kenobi added:
“Other than the Pepe dev wallet (currently holding 2%), no other wallet (besides exchanges) holds more than 0.9% of supply. This is long-term bullish for PEPE. Sell the remaining 2%! !!”
Technically, PEPE has been trading around a recognized accumulation zone around $0.00000085, which saw a 120% price increase between June and July 2023. Therefore, given PEPE’s oversold relative strength index (RSI), the chances of a market rally at this level are high.
If the price of PEPE rebounds here, the next upside target for 2023 would be the 50-day exponential moving average (50-day EMA; red wave) near $0.00000121, which represents an increase of about 45% from current price levels.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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