After hitting an all-time high (ATH) of $0.00002524 approximately three weeks ago, the Pepe [PEPE] token has encountered challenges in sustaining an upward trajectory. Consequently, the memecoin has consistently hovered within the $0.000022 and $0.000018 range, showing signs of consolidation.
Despite the correction observed in the market, the recent surge to the ATH resulted in substantial profits for long-term holders of the token.
As the memecoin struggles to generate further gains, particularly due to market pressure, long-term holders, including significant investors known as whales, have opted to sell their holdings to maximize profits.
Significant Pepe Token Sale of 356.2 Billion Tokens by a Major Holder
According to Spot On Chain data, a sizeable PEPE investor has initiated the process of selling off a substantial portion of their assets. In the past day, this investor has transferred 356.2 billion Pepe tokens valued at $7.3 million to the Kraken exchange.
Having accumulated 375.65 billion tokens since 2023 through a withdrawal from Gemini, the investor decided to sell a portion of their holdings in February 2024, resulting in total earnings of $7.54 million.
When significant investors like whales choose to sell off their holdings, it indicates a strategic move to either maximize profits following a surge in prices or to prevent potential losses if market conditions deteriorate after a period of growth.
Furthermore, this selling activity can be interpreted as a lack of confidence in the current market conditions. Prolonged selling by major holders often leads to a surplus of tokens in circulation, causing prices to decrease due to oversupply.
Potential Effects on Price Trends?
Based on the analysis conducted by CryptoCrypto, the decision by this whale investor to divest their assets is a reflection of overall bearish sentiment prevailing among large token holders.
There has been a noticeable increase in token outflows from major holders compared to inflows, as indicated by data from IntoTheBlock which revealed a consistent negative netflow among large holders over the last four days. This figure has fallen from 381.86 billion tokens to -534.57 billion Pepe tokens, signaling active selling by major investors.
Additionally, the diminishing MVRV Long/Short Difference further supports the bearish sentiment, dropping from 41% to 37%. A decrease in the MVRV Long/Short Difference value signals a decline in confidence among long position holders as their profit margins shrink.
What Lies Ahead?
While the selling activity of whales typically exerts downward pressure on token prices, the impact has not been immediately reflected in the Pepe market. On the contrary, Pepe has shown a modest recovery on price charts.
As of the latest data, Pepe is trading at $0.00002056, representing a slight 0.09% increase on a daily basis. Moreover, the altcoin has shown positive movements on weekly and monthly charts, recording a 10.69% and 145.11% increase respectively.
In conclusion, as bearish sentiments among whales persist and short-term holders seek higher returns, Pepe is anticipated to continue its consolidation pattern.
Consequently, amidst the ongoing battle between bullish and bearish forces, Pepe is likely to remain confined within a consolidation range. Should the current upward trend on price charts gain momentum, Pepe could target a reclamation of the $0.0000227 resistance level. Conversely, if bearish pressures intensify, Pepe is expected to find support around $0.00001885.