Back to the list

PEPE could decline further as long-term holders continue to shed holdings

fxstreet.com 15 August 2024 07:23, UTC

Two $PEPE whales have potentially sold nearly 1 trillion $PEPE in the past 24 hours.
On-chain data shows $PEPE long-term holders, taking profits since March, are more sensitive to price dips.
$PEPE could experience a massive correction following the formation of a daily head-and-shoulders pattern.

$PEPE is down nearly 2% on Wednesday following key insights that long-term holders have been consistently booking profits since March. The move appears to be creating a head-and-shoulder pattern on the daily chart for $PEPE, which can trigger a heavy correction.

$PEPE’s on-chain metrics and price action indicate potential decline

Some $PEPE whales have been dumping their holdings in the past 24 hours, according to Lookonchain's data. A whale who spent $3.13 million to buy 420B $PEPE during the market crash on August 5 and August 12 potentially sold all of its holdings for a profit of only $30K.

Following the move, another whale who spent $8.34 million to accumulate 750.38B $PEPE transferred 500B $PEPE worth $4 million to the Kraken exchange, potentially realizing a loss of $2.3 million. The whale still holds 250.33B $PEPE worth $2.02 million at the time of writing.

The recent dump may not be peculiar to these whales alone as the exchange inflows of $PEPE saw a spike above 1.44 trillion $PEPE tokens as of 12:00 GMT on Wednesday, according to Santiment's data.

$PEPE holders have potentially been shedding their holdings whenever the meme coin sees a spike or a dip. The 365-day Dormant Circulation, which tracks coins that were last moved in the past year, has seen spikes, especially when $PEPE attempts to dip after recording a new high.

$PEPE Dormant Circulation (180day & 365day)

This suggests that this cohort may now be more sensitive to price dips than a rally, especially after the 180-day holders shed a portion of their holdings during the market rally in March before graduating to the 365-day Dormant Circulation category.

Such behavior suggests that holders of old coins have feeble hands and may dump during key price movements.

The 180-day to 365-day Realized Cap HODL Waves suggest $PEPE long-term holders (LTH) may have been consistently taking profits since March. A decline in this metric suggests old coins are being spent or sold, and vice versa when the metric Increases. As the chart below reveals, $PEPE LTHs have consistently shed their holdings.

$PEPE Realized Cap HODL Waves (180d to 365d)

On the technical side, $PEPE seems to be forming a head and shoulder pattern on the daily chart. If $PEPE breaches the neckline around $0.00000760 and falls further below the left shoulder's low at $0.00000570, it could face a massive correction.

$PEPE/$USDT Daily chart

A daily candlestick close above $0.00001405 will invalidate the bearish thesis.

Additionally, this analysis is subject to Bitcoin's price movement as top meme coins often mimic its price.

fxstreet.com