The crypto market has seen its fair share of scams, rug pulls, and pump-and-dump schemes.
It is even safe to say that crypto is one of the most dangerous markets to trade in. This is because of its high volatility and how assets tend to shift from highly bullish to highly bearish in a matter of moments.
Enter memecoins.
Memecoins have become very popular among crypto investors and enthusiasts since Dogecoin became popular in 2021.
However, a new and exciting memecoin entered the limelight in 2023. And while many praised it as the "future of memecoins" and a "dogecoin killer" when it first launched, investors are starting to have disturbing fears.
Let's take a look at $PEPE's rise to popularity, how it is performing, and some things you should know about this memecoin, going forward.
PEPE is another memecoin, just like Dogecoin and Shiba Inu.
PEPE is based on the Pepe the Frog meme, which was first made popular by Matt Furie in 2005.
Just like Shiba Inu, it was deployed on the Ethereum mainnet on April 17th.
And two weeks after its launch, Pepe had already surged by an amazing 4000% to $0.0000372 at a $1 billion in market cap.
For context, it took Dogecoin, years, and Shiba Inu almost a whole year to hit the $1 billion market cap milestone.
PEPE has spent the next few months ever since, going through several ups and downs that make investors wonder if this was all some elaborate scam all along.
CoinMarketCap data even shows that PEPE is now down by a whopping 80% from its all-time high, after four months of activity.
This is some very bad news for people who bought PEPE close to the top, in the hopes of making a quick buck.
As if that weren't enough, just this week, PEPE plunged by a whopping 20% in a single day, after some very disturbing on-chain developments.
PEPE responded with a whopping 29% decline between Thursday and Friday 24 and 25 August, after millions of dollars worth of the token flooded crypto exchanges and spooked investors.
This sudden flood of tokens drew attention to some shady on-chain activity, involving some of the largest PEPE holders.
By noon on Thursday, more than 16 trillion tokens left the PEPE multisig wallet and entered crypto exchanges like Binance, OXK, and Bybit.
If you didn't know before, a multisig wallet is a kind of crypto wallet that requires the digital signatures of multiple people to execute transactions.
This way, no single member of the group can withdraw funds without permission.
And because of these trillions of PEPE suddenly entering exchanges, on-chain sleuths went looking.
It turned out that instead of requiring eight signatures to move funds, the PEPE multisig wallet now required two, as this tweet highlights.
It doesn't take a scientist to figure out that this looks very much like a typical rug pull.
After on-chain sleuths uncovered the issue with the multisig wallet, PEPE went straight down from $0.00000111 to around $0.00000078.
Since then, PEPE has been declining further.
As it turns out, PEPE has broken through June's $0.00000083 lows and may be eyeing some significant downside momentum as shown below.
Since PEPE has now broken through a lower low, it is in uncharted territory. This makes predicting its price action a slight challenge.
However, we can draw a descending trendline from July's lows to the previous one, and end up with this:
This paints a vivid picture: PEPE has to stay within the channel to prevent a significant decline further down to less than $0.0000007.
PEPE is currently under most of its moving averages like the 200 and 50-day MAs.
However, slightly below the $0.00000078 zone would be a good place to set a stop-loss, because a break and close below this level may signal further downside movement.
The answer is: "Likely not" (If something particularly drastic doesn't happen soon, that is).
On larger timeframes, PEPE appears to be forming the start of a descending wedge.
Descending wedges, or falling wedges occur when an asset is generally bullish but suddenly enters a bearish correction as the price recalibrates.
The bad news is that descending wedges are temporarily bearish.
If PEPE is indeed in a descending wedge, we may see further declines to $0.00000053 or even lower.
The good news is, that these lows would be the perfect place to enter the market, and then ride the trend as PEPE surges to the top again.
Memecoins are known for their high risk, and their tendency to double or triple in a matter of moments.
Considering how the market is still in an overextended bear market, it is still too early to determine if PEPE is a scam or not.
Drastic declines are common to memecoins and are not an indicator of the project being a scam or rug pull.
On the flip side, PEPE can also move to the upside as quickly as it can decline.
It is important to do your own research before investing in cryptocurrencies and to execute each order buy/sell order with care.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.