Pepe (PEPE), the new meme-coin, has entered a sharp correction phase after a surge of more than 2,000% since its debut a few weeks ago. On May 3, the PEPE price dropped to $0.00000089, down about 35% from its record high of $0.00000138 established two days ago. As a result of the correction, its market capitalization slipped by nearly $80 million, thus pushing it out of the top-100 top cryptocurrency index.
Whales Control 45% of Pepe’s Circulating Supply
A mix of technical and fundamental indicators hint at further downside for PEPE price. The top 100 richest PEPE addresses, aka “whales,” control 45% of the token’s circulating supply, according to data tracked by CoinCarp.com. These 100 addresses might belong to 100 different individuals. But one entity can control more than one address, which gives a limited number of whales more say over the direction of PEPE future price trends, increasing risk of price manipulation.
For instance, Lookonchain revealed that five addresses allegedly linked to the Pepe team made a $1.23 million profit in a thin liquid market. They purchased 8.87 trillion PEPE tokens at a low price and sold over 90% of their holdings at a higher price on Uniswap. Some of the top PEPE holders are centralized exchanges. But, according to data tracked by analyst 008.eth, non-exchange PEPE whales have reduced positions recently, hinting at profit-taking that coincided with the ongoing price correction.
The evidence of fewer whales controlling the uptrend could negate the gains in the short term. Technicals concur. The four-hour chart shows that PEPE/USDT has formed higher highs, but its relative strength index (RSI) has formed lower highs since April 30. In other words, a bearish divergence that suggests PEPE’s upside momentum will likely weaken in the short term.
Moreover, meme-coins are notorious for their sharp volatility and major price moves. Dogecoin, for instance, has rallied 7,000% since 2020 thanks to vocal support from billionaire investor Elon Musk.