Pepecoin (PEPE) , once an extremely profitable memecoin, has plunged by more than 80% four months after its record high. Now, technicals suggest that the memcoin could be at risk of even bigger losses in the coming weeks or months.
Pepecoin faces rug pull allegations
On Aug. 24, several rogue Pepecoin developers changed the number of signatures required to move tokens from their multi-sig wallet from five-out-of-eight to two-out-of-eight. Then, they sent $16 million worth of PEPE to crypto exchanges, suggesting that they wanted to sell.
A segment of market analysts viewed these mov as a hint of an impending "rug pull," raising fears that the PEPE price may crash to zero in 2023.
Previous "rug pulls" such as MULTI, the native token of Multichain's cross-chain bridging protocol, has dropped nearly 98% from its peak. The decline has appeared partially due to allegations that Multichain's $125 million hack in July 2023 was part of a broader rug-pull scam.
Similarly, in July 2023, a crypto developer associated with the Encryption AI project committed a $2 million rug-pull fraud. As a result, the Encryption AI token, 0XENCRYPT, crashed 99% to an all-time low of $0.02.
PEPE price paints deadly descending triangle
Market analyst Nebraska Gooner suggests that PEPE price could soon plunge to nearly zero due to a descending triangle formation on the four-hour chart.
A descending triangle in finance is a bearish continuation pattern characterized by the simultaneous formation of a falling trendline resistance and horizontal trendline support. It resolves after the price decisively breaks below the support and falls by as much as the triangle's maximum height.
PEPE hopefuls buy the dip
On a brighter note, some PEPE investors have used the token's price decline as an opportunity to buy the dip. Notably, the supply held by entities with a balance between 10,000 and 100,000 PEPE tokens has jumped substantially since Aug. 27.
This accumulation is underway as Pepecoin hopefuls assert that the market can absorb any further selling pressure from the token devs.
"The @pepecoineth devs used to hold 6% of the PEPE and sold 16T tokens equaling 4% of the supply," noted Kenobi, a Pepe investor, adding:
"No other wallet (besides exchanges) holds more than 0.9% of the supply, except the Pepe dev wallet, which now holds 2%. This is long-term bullish for PEPE. SELL THE REMAINING 2%!!!
Technically, PEPE trades near a recognized accumulation area around $0.00000085 that witnessed a 120% price rally during the June-July 2023 session. Thus, chances of a market rebound at this level are high given PEPE's oversold relative strength index (RSI).
If PEPE price bounces here, then the next upside target comes to be its 50-day exponential moving average (50-day EMA; the red wave) near $0.00000121 in 2023, up around 45% from the current price levels.
