Pepecoin’s market valuation decreased by 65% on May 12, a week after achieving a record high of $1.54 billion. Profit-taking accounts for the primary reason behind this extreme price correction, as the cryptocurrency rallied from negligible to as high as $0.00000372 after its launch on April 14. Pepecoin emerged as the fastest-growing ERC-20 token in the crypto market’s history by mimicking memecoins based on popular internet memes such as Dogecoin. The anonymous team behind Pepecoin took advantage of the meme’s current popularity on Twitter by creating a coordinated meme campaign that catalyzed early adoption. The media ran stories about early PEPE investors who turned thousands of U.S. dollars into millions within a week, thereby prompting more people to join the frenzy. The number of PEPE holders has grown from negligible to over 105,000 in a month, according to CoinCarp.com.
Despite these positive price catalysts, Pepecoin lacks any real use-case for the average person, which is similar to Dogecoin. PEPE is only about 5% of Dogecoin’s market cap of over $10 billion, and it is also 10% of the second-largest memecoin Shiba Inu’s market cap of around $5 billion. However, Chase Devens, a researcher at Messari, argues that it wouldn’t be surprising to see PEPE surpass both at some point, if only momentarily, now that it has gained legitimacy. The immediate listings across popular centralized crypto exchanges like Binance are the primary reason for the rapid rise in valuation.
PEPE’s centralized exchange debut occurred only six days after launch, and 22 days later, the token started trading on Binance, the world’s largest crypto exchange by volume. PEPE perpetual futures are now available on exchanges like Binance and Bybit to give users access to 100x leverage against PEPE’s price. In only a few days, PEPE derivative volumes have surpassed daily spot trading volumes. The launch of PEPE coincides with the 100% rise in Uniswap’s daily active users on Ethereum, now approaching its all-time high of 90,000 from May 2021.
The excitement and growth of PEPE show similarities with the final phase of the 2021 memecoin bull run. PEPE’s short-term gains appear identical to DOGE’s price rally on the weekly charts, and its ongoing correction looks similar to DOGE’s 90%-plus decline from its record high of $0.75 in May 2021. In other words, Pepecoin’s price could extend its ongoing correction in the short term toward $0.00000083, or 35% below the current price levels. Moreover, a Dogecoin-like 90% crash from the market top would bring PEPE’s price to $0.00000035, which served as resistance in April 2023.