- PEPE is down more than 25% in the last 24 hours and over 56% down since ATH.
- The market cap of PEPE is $785,271,095 and its 24-hour trading volume is $925,953,065.
- One Lower High has already formed in the 4H timeframe. Demand for PEPE is growing weak.
- PEPE has 106,120 holders, a 26.57% drop from 2 days ago when it had over 144,000 holders.
- PEPE whales are selling their assets to unsuspecting pump chasers.
Memecoin season has always been a much anticipated time in the crypto space. Every once in a while, a meme coin rises that makes millionaires from just a few dollars of investment.
In 2021, it was the famous Shiba Inu, but in 2023, many are wondering if Pepe (PEPE) is the new Shiba Inu. Nevertheless, whether it’s SHIB, DOGE, or PEPE, it is important to identify the top as it can make the difference between making millions and losing investment. Here are 5 ways to determine the top for a meme coin.
24H Trading Volume is Greater than the Market Cap
High trading volume is something we all look for in a meme coin. This is because the more the trading volume, the more liquid the asset. It also shows that the market is generally very interested in the meme coin. What usually follows higher volumes in DEXes is free listings on top-tier centralized exchanges.
However, when the 24-hour trading volume surpasses the market cap of the project, this is bad news. It means that there is a market speculation. The meme coin is overpriced compared to its actual value.
As of the time of writing, the market cap of PEPE is $785,271,095 and its 24-hour trading volume is $925,953,065.
Lower Highs Forming on a Higher Time Frame
It is impossible to confirm a top without consulting the charts. Higher Time Frames (HTFs) on trading charts include the 4H, 6H, 8H, 12H, and onwards. These are significant time frames since they show the general trend of an asset, filtering out the intra-day noise.
When the price actions start forming lower highs, it is bearish for the asset because it shows the meme coin is losing momentum and demand for that asset is growing weak.
PEPE has been on a downward trend since Friday, May 5, 2023, with one Lower High already formed in the 4H timeframe. Demand for PEPE is growing weak.
Number of Holders Decreasing, or Rate of Holder Growth Significantly Slowing Down
The strength of a project is directly proportional to the size of its community. There are many legitimate and quality blockchain startups in the space that have gone to early graves because they did not invest in the community.
This is a self-explanatory metric – if you notice holder growth reducing, then the investors or the market is losing interest in the project. You want to be where the majority of the investors are.
At the time of writing, PEPE has 106,120 holders, a 0.046% increase in the last 24 hours. However, compared to May 7, 2023 (two days ago from the current time of writing), PEPE had over 144,000 holders. This is a 26.57% drop in just 2 days.
This can be an indicator that investors do not really have faith in the project and would be willing to abandon the project at the slightest rumor of FUD.
Large Whales Selling
Whales are healthy for any cryptocurrency project. A whale is a term in the crypto community that refers to either individuals or entities that hold a large amount of a given crypto. There are Ethereum whales, Bitcoin whales, Chainlink whales, etc.
Normally, the community dictates at what value holding an individual or entity becomes a whale. You can find this information (for specific projects) in items called “whale charts”. Nevertheless, most of the time, an individual naturally becomes a crypto whale if the amount of his crypto holding is enough to influence the markets if they dump the assets on the market.
When whales begin dumping meme coins, it is never a good sign. Most of the whales are early buyers who got the coins for pennies on the dollar. Some of them have access to insider information and hence, what they do is important.
PEPE whales are selling their assets to unsuspecting pump chasers. From the chart above – a leaderboard of the top 10 most profitable addresses on PEPE – you can see that two of the ten whales have completely exhausted their positions and hold no PEPE.
Eight of the ten whales have sold off more than 50% of their position.
Funding Rates Shift from Negative to Positive
Funding rates are payments made to traders (either long or short) in the crypto futures market. The funding rate is calculated based on the difference between the perpetual contract price and the spot price of the asset being traded.
When the funding rate is negative, it means shorts are dominant and that the traders who have shorted the asset in question are willing to pay long traders to keep their bearish bets open. In short, negative funding rates mean more people are bearish on the asset. The opposite is true.
A positive funding rate means the perpetual price of the underlying asset is higher than the market price.
PEPE funding rates remain negative on OKEX, Bitget, and CoinEX. However, on Gate.io the funding rate is positive. The overall funding rate for PEPE is negative, which means most traders are bearish on PEPE.
Conclusion
These indicators can greatly assist you to target tops and exit the market before your gains can be reduced to peanuts. PEPE investors that followed these indicators are probably 90-100% out of PEPE with hefty profits. Always do your due diligence to avoid becoming exit liquidity for other people.