Over the last seven days, the Pepe [PEPE] token has experienced notable growth, showing an increase of 13.07%.
This surge in value has resulted in higher profits for holders who have had the token for an extended period or possess a large quantity. Consequently, investors, especially large holders known as whales, have seized this opportunity to cash in.
SpotOnChain reported that a savvy whale successfully offloaded 217 billion Pepe tokens valued at $4.54 million through the Kraken exchange. Post-sale, the whale pocketed a profit of $767,000. Despite divesting this chunk, the whale still retains 1.21 trillion Pepe tokens valued at $25.1 million across two separate wallets.
When whales initiate sell-offs, their primary motives are typically profit maximization or risk mitigation.
Analyzing the Impact on Pepe’s Performance
As anticipated, the increased selling pressure has had an adverse effect on Pepe’s price trajectory. At present, Pepe is being traded at $0.00002049, reflecting a 1.51% decline based on daily figures.
However, it should be noted that this price dip cannot be solely attributed to whale activity; the overall market sentiment is currently bearish.
The bearish sentiment is clearly evident from a bearish crossover observed on the Directional Movement Index (DMI) 48 hours ago, indicating a strengthening downward trend for the memecoin.
This downward momentum is further accentuated by a diminishing Advance-Decline Ratio (ADR) falling below 1. A value beneath 1 on the ADR scale suggests that losses are outweighing gains for the memecoin.
Moreover, the weighted sentiment surrounding the memecoin remains pessimistic, signaling a prevalence of negative sentiments in the market.
Furthermore, a large proportion of investors are opting for short positions, with short traders occupying 55% of the total accounts. This surge in short trading activity indicates a bearish outlook and an expectation of further price declines.
With short traders asserting control, it is evident that market participants are bearish and anticipate continued price depreciation.
Lastly, Pepe’s stock-to-flow ratio currently stands at zero, indicating an oversupply scenario. This oversupply condition implies downward pressure on Pepe’s prices due to an excess of tokens available in the market.
In essence, despite the recent gains, Pepe is yet to demonstrate a robust price recovery. In the midst of the aforementioned whale sell-off, sellers are dictating market dynamics, with bearish sentiment prevailing.
Therefore, if the prevailing conditions persist, Pepe may witness a decline to $0.000019. However, in the event of a market reversal with increased buying activity, the memecoin could potentially reattain the $0.000021 mark.