The meme coin Pepe (PEPE) is facing the possibility of a significant price drop as its supply on exchanges saw a notable spike, indicating an increasing profit-taking trend. Data from Santiment reveals that exchange reserves of these tokens continue to increase, prompting concerns of a potential future decline in value.
Although the price of PEPE recently hit $0.000009, experiencing a rise of up to 120% in the past week, analysis shows that the increase in supply on exchanges reached almost 5% in the last four days. Meanwhile, supply outside the exchange decreased by 2% in the same period.
The current increase in PEPE sales is due to profitable transactions involving altcoins, along with increasing interest in meme coins. However, an assessment of PEPE transactions shows that the daily ratio of transaction volume to losses is decreasing, which may be a potential sign of future price declines.
The Market Value to Realized Value (MVRV) ratio of the PEPE token also showed signs of concern, reaching 347.63%. This suggests that the current market value of PEPE far exceeds the average price when it was last traded, raising questions about whether this asset is overvalued.
Thus, although investors holding this meme coin may have experienced significant gains in recent times, there is the potential for the price of PEPE to experience a decline in response to supply surges on exchanges and changes in the ratio of profitable transactions. This is a period that requires caution for investors, due to rapid market changes and potential risks associated with crypto volatility.