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Cryptocurrencies have been extremely volatile in March, with investors seeing massive gains in just 6 days. Some altcoins have increased more than fivefold. However, cryptocurrencies are notorious for disappointing those expecting uninterrupted rises or falls. In fact, this is true for all markets, but in cryptocurrencies, the fluctuations are much more rapid.
The Rise of PEPE Coin
One of the most popular altcoins in recent days has been PEPE Coin, which saw its price increase by fivefold. The surge in PEPE Coin’s price was related to abnormal demand from whales, in addition to the general change in market sentiment. In the last 10 days alone, 48 trillion PEPE were purchased. A significant portion of the $385 million worth of purchases was made by whales.
This situation led to the meme coin jumping 506% to $0.00000820, which was the second all-time high (ATH) level seen after the Binance listing. The demand born from an appetite for volatility should not be forgotten. Looking at a broader perspective, 37% of the circulating supply is currently held by short-term investors.
While BTC is rapidly rising, altcoins expected to see speculative increases are experiencing abnormal demand. The fact that 37% of the circulating supply is in the hands of short-term investors supports this assumption.
Potential Decline for PEPE Coin
We discussed the reasons for the rise in the first section, but these also highlight the potential for rapid decline. If PEPE Coin cannot sustain its rally, we might see quick sales as short-term investors withdraw liquidity.
These traders have been holding their PEPE for less than a month and are sensitive to sudden sales. Unless this supply passes to medium-term investors (addresses holding the supply for six to 12 months), the recently acquired 48 trillion PEPE could lead to significant selling pressure.
PEPE’s price may see a further decline before turning the $0.00000807 resistance into support. If the sell-off intensifies, the price could drop to $0.00000474. ADX and MACD indicators appear encouraging for a continuation of the rise.
If the $0.00000800 level turns into support, the movement could continue to $0.00000959. Afterwards, the price could be expected to drop another zero.
