The market valuation of Pepecoin (PEPE) is down 65% on May 12, a week after hitting an all-time high of $1.54 billion.
Profit taking appears to be the main factor behind the extreme price correction after surging from almost zero to $0.00000372 since its launch on April 14, while emerging as the fastest growing ERC-20 token in crypto market history.
What is PEPE?
PepeCoin gained attention by copying features of MemeCoin based on popular Internet memes. The most famous is Dogecoin (DOGE), which uses the famous Shiba Inu dog meme as its logo.
PepeCoin is based on the “Pepe the Frog” meme created by Matt Fury in the 2005 cartoon “Boys Club”. The humanoid frog became a mainstream meme in the mid-2010s, with singers Katy Perry and Nicki Minaj using it in their tweets.
i loved australian jet lag pic.twitter.com/kriAAd6mZe
— Katy Perry (@katyperry) 8 November 2014
In 2021, Barnbridge founder Tyler Ward launched a low-resolution Pepecoin NFT collection, which sold for over $60 million on the OpenSea auction platform.
Similarly, the anonymous team behind Pepecoin has taken advantage of the current popularity of memes on Twitter.
they spurred early adoption To create A coordinated meme campaign. At the same time, stories appeared in the media about early PEPE investors turning investments from thousands of US dollars into millions within a week, prompting more people to join the craze.
For example, according to CoinCarp.com, the number of PEPE holders has grown from negligible to over 105,000 in a month.
But despite these positive value catalysts, Pepecoin remains without any real use case for the average person. However, this is not unlike Dogecoin, whose notoriety in recent years has more to do with Elon Musk’s endorsement than its usefulness as a token.
Can PEPE Overturn Dogecoin, the Shiba Inu?
PEPE still only accounts for about 5% of Dogecoin’s $10 billion market cap. It also owns 10% of the Shiba Inu’s second largest Memecoin (SHIB), which has a market cap of around $5 billion.
Chase Devens, a researcher at Messari, argues, “It would not be surprising if PEPE at some point surpasses both, even if only temporarily, as it gains legitimacy.” Devens said that the immediate listing on popular centralized crypto exchanges like Binance is the main reason for the rapid growth in valuations.
For example, the first centralized listing of SHIB appeared more than 260 days after its launch. By comparison, PEPE’s centralized exchange launched just six days after launch. And after 22 days, the token started trading on Binance, the world’s largest crypto exchange.
“Not only do these integrations lower the barrier to retail speculation, they also enable major capital providers to offer off-chain market making services,” Devens said:
“PEPE perpetual futures are now available on exchanges such as Binance and Bybit, providing users with 100x leverage against the price of PEPE. In just a few days, PEPE derivatives volumes have already surpassed daily spot trading volumes.
The launch of PEPE coincides with a 100% increase in daily active users of Uniswap on Ethereum, which has now reached an all-time high of 90,000 by May 2021.
Most of these users are engaged in memecoin trading, which includes other newly launched tokens such as WOJAK, TURBO, and AIDOGE.
More pain for Pepe Price?
As a reminder, the excitement and growth of PEPE parallels the latest phase of the 2021 Memecoin bull run.
RELATED: Pepe Shame on PEPE Investors
Notably, PEPE’s short-term gains appear to be similar to DOGE’s price gains on the weekly chart. The ongoing correction also looks like a drop of over 90% from DOGE’s all-time high of $0.75 in May 2021.
In other words, Pepecoin price could extend its ongoing near-term correction to $0.00000083, or a 35% downside from its current price level.
Furthermore, a Dogecoin-like 90% crash from the market top would push PEPE price to $0.00000035, which acts as resistance in April 2023.
This article does not constitute investment advice or suggestion. Every investment and trading move involves risk and readers should do their own research when making decisions.
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