Key Takeaways:
- Traders continued to dump their PEPE tokens.
- Moreover, the Pepe coin price is moving inside a bearish technical formation.
- A Sam Bankman-Fried connection pops up amid the PEPE crash.
NEW DELHI (CoinChapter.com) — Meme token Pepecoin, which had led the memecoin frenzy in April earlier this year, continued its decline after a miniscule recovery post the Aug 17 market crash.
Moreover, the memecoin price recorded over 29% losses from Aug 25’s high of $0.000001107 after news of suspicious activity on the PEPE multisig wallet on social media created a FUD.
An X (formerly Twitter) user highlighted that the Pepe coin’s multisig wallet changed its threshold to 2/8 signatures. Simply put, transactions from the wallet would only require two signatures from the previous five.
A larger number of signatures ensured the wallet’s security, prohibiting a small group of users from selling the wallet’s holdings for personal gains. Furthermore, the user noted that the wallet had moved some PEPE tokens to exchanges.
Crypto sleuth ZachXBT also took cognizance of the transactions, sharing that the Pepe coin multi-sig wallet sent “$6.5 million of PEPE to Binance, $8.2 million of PEPE to OKX, $0.43 million of PEPE to Bybi, and almost $0.39 million worth of PEPE to another address.”
On-chain data provider Lookonchain confirmed the transactions that the Pepe multi-sig wallet deposited about 17.3 trillion PEPE tokens (worth nearly $18 million) to various exchanges. Afterward, the Pepe wallet had about 10.7 trillion PEPE tokens left.
Users React To PEPE Multi-Sig Wallet’s Suspicious Changes
News of the wallet transaction threshold change and transactions resulted in panic selling, with an early PEPE buyer dumping 1.88 trillion tokens for 1,010 ETH tokens. The buyer sold his holdings within an hour of the Pepe wallet moving its holdings to exchanges.
The data provider also shared that another early buyer of PEPE tokens sold 932 billion tokens for roughly $870,000. Both users were reacting to news of the Pepe coin team moving 16 trillion PEPE tokens to exchanges.
However, the mood in the market was not all doom and gloom, with several users remaining positive about PEPE’s prospects. X user Kenobi noted that the Pepe wallet transaction left developers with only 2% of the total token supply, hinting that PEPE holders now help more control.
If you think this is anything but bullish, i can’t help you.
Kenobi claimed in his X post
Other users agreed with Kenobi, with one claiming that the current FUD would show “who is really in the community.”
An on-chain analyst with the username Yazan also remained bullish on PEPE’s prospects. Interestingly, the analyst claimed PEPE got more traction than the developers initially hoped, so the team “decided to let it play out.“
Yazan stated that while the PEPE developers have decided to exit the project, he remained “bullish AF” on PEPE.
PEPE Coin’s SBF Connection?
Another FUD plaguing the memecoin’s price action was a conspiracy theory doing the rounds on X and other social media that infamous FTX founder Sam Bankman-Friend, or SBF, was one of Pepe coin’s creators.
Crypto investor Axel Bitblaze told his more than 79,000 X followers that it would not surprise him if the conspiracy theory were true, given that strong evidence linked SBF with another meme token, BALD, that rug pulled users early in August.
A crypto investor with the X handle @hype_eth did a language analysis of the tweets from Bald developer and Bankman-Fried.
The post highlighted that certain words, for instance, using the conjunction “nor” repeatedly, indicated SBF playing a key role in the BALD coin rug pull scam. X users also pointed out that SBF’s language style matched Chef Nomi’s creator, another scam project.
A key argument fueling the speculations was that the Pepe coin’s X account stopped posting on Aug 11, the same day that SBF went to jail.
Another X user cited an unverified screenshot of a Telegram chat group, where an AI chatbot claimed SBF was “indeed” a part of the Pepe team. However, the credibility of the screenshot remains dubious at best.
PEPE Price Moving Inside A Bearish Technical Pattern
Meanwhile, the PEPE price has formed a bearish technical pattern called the ‘Descending Triangle.‘
The pattern usually forms at the end of a downtrend. Still, it can also occur as a consolidation period during an uptrend, indicating that the bullish momentum for a token is exhausting and a reversal is nigh.
In detail, a descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern. The height of the triangle’s thickest section determines the price target in a descending triangle setup.
Currently, the PEPE price is testing the horizontal trendline support at the base of the triangle pattern. If the pattern pans out, PEPE could fall 70% to $0.0000002615 before recovering.
PEPE Price Crashes, But Bulls Fight Back
PEPE price declined nearly 31% WTD in the week beginning Aug 21, dropping to a daily low of $0.00000018 on Aug 25.
However, some PEPE bulls seemed to remain in the market as the meme token recovered some of its losses in the day, evident from the long lower wick on the token’s Aug 25 daily candle.
Yet, if the downtrend continued, the PEPE price would be forced to re-test the support level near $0.000000804.
Moreover, failure of the immediate support level could send the meme coin price down to its support level near $0.00000067.
On the other hand, if more buyers enter the market, the PEPE coin price could rise to the resistance near $0.00000101. Furthermore, breaking and consolidating above the immediate resistance could help PEPE price target its 20-day EMA (red wave) resistance near $0.00000115 before retreating.
The RSI for PEPE was oversold, with a value of 28.24 on the daily charts. Oversold RSI levels often precede a bullish trend reversal. Hence, traders consider the pattern a buy signal, which could explain the PEPE price candle’s long lower wick on Aug 25.
