The popular memecoin Pepe (PEPE) saw a price increase of 12% on Tuesday following Elon Musk’s move on X. He changed his display name to 'Kekius Maximus' and used the Pepe the Frog avatar, referring to the online game Path of Exile.
However, the initial excitement quickly faded. As the hype surrounding Musk's actions began to subside, PEPE also lost some of its recent gains.
The brief price surge of PEPE: Not due to Elon Musk
On Tuesday, tech billionaire Elon Musk renamed his X account to 'Kekius Maximus' and changed his profile picture to a meme of Pepe the Frog, depicting the warrior character in armor holding a video game controller.
This move quickly boosted the optimistic sentiment around the PEPE memecoin, pushing its value up by 12% in a day. However, the initial excitement seems unlikely to last long, as the price has started to decline. Over the past 24 hours, its value has dropped by 4%.
During that time, PEPE's trading volume surged by 31%. When the price of an asset drops and trading volume increases, this can indicate higher selling pressure as more participants seek to exit their positions. Thus, price growth is driven by market speculation rather than actual demand for the asset, making it unsustainable.
PEPE Price and Trading Volume | Source: Santiment
Furthermore, the increased outflow of cash from the PEPE market further reinforces this bearish outlook. According to Coinglass, $6.34 million was withdrawn from the spot market in the past 24 hours. This is in stark contrast to the $45 million inflow recorded in the PEPE market on Tuesday.
When an asset records cash flow leaving the market, it means that more assets are being sold or withdrawn from the market than are being bought, signaling decreased demand as investors or traders are moving their holdings out of the asset.
PEPE Spot Inflow/Outflow | Source: Coinglass
PEPE Price Prediction: Could drop to $0.0000017
On the daily chart, PEPE's super trend indicator is above the price, confirming bearish demand. This indicator tracks the direction and strength of price trends. It is displayed as a line on the price chart, changing color to indicate the trend: green for bullish trend and red for bearish trend.
When the price of an asset falls below the super trend line, it indicates bearish momentum in the market. This line acts as a resistance level, making it hard for the price to overcome.
For PEPE, this resistance level is $0.000024. If the downtrend continues, the price of PEPE could slide down to $0.0000017.
PEPE Price Chart | Source: TradingView
Conversely, the price may try to break through the resistance level of $0.000024. If successful, it will reclaim the all-time high of $0.000028.
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