Key Takeaways:
- PEPE is down 10% in the previous 24 hours.
- Initially, the coin pumped on high market confidence.
- The memecoin family followed suit.
YEREVAN (CoinChapter.com) – Frog-themed memecoin PEPE reversed after its 115% rally from Oct 20-26, dropped 10% to $0.000002210 on Oct 27, and continued to decline in the New York hours.
PEPE price drops from its two-month high
If the PEPE lovers pushed the coin to a two-month high, why would the price action reverse so rapidly? Because the frog token is a great indicator of investor confidence. Let’s dive deeper into the absurdity of memecoin trading.
PEPE’s latest pump didn’t just fall out of the sky. The memecoin initially traded higher as Bitcoin’s bullish price action invited more funds into the sector. However, REGARDLESS of how bullish the markets actually are, memecoins tend to pump off the investor CONFIDENCE in the bullish markers.
Let’s just rewind to the fake Bitcoin spot ETF approval news. It took no time for Bitcoin investors to jump in and BUY without checking the authenticity of the announcement.
Additionally, once traders see those green candles, it’s a no-brainer for them to take more risks. And what could be riskier than a nonsense memecoin?
Memecoins follow the frog
But once risk-takers feel the reversal wave coming in, those memecoins dump harder than a ton of bricks. As Bitcoin started to correct, the risk-loving frog investors took profits at the first whiff of trouble.
Notably, PEPE whales have started exiting the market since mid-October.
How did other meme coins fare? 8 out of 10 top memecoins reversed in the previous 24 hours. Interestingly, PEPE and the ‘top-nonsense’ coin named HarryPotterObamaSonic10 dropped the most, 7.4% and 5.8% respectively.
The founder of Crypto Banter Ran Neuner agreed to PEPE’s ‘leading memecoin’ role and suggested watching the token as an indicator of upcoming market reversal.
If you want to know when a pull back is coming, just watch PEPE. It’s literally an index for when the market is getting overheated. When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time.
he tweeted.
PEPE hasn’t been around long enough to indicate the market reversal EVERY TIME per se. However, we get the gist. Once investors pump the riskiest coins, expect a pullback in the making, and lower confidence in a bullish continuation.
