PEPE price drop wipes $1B from its total market cap

PEPE, a meme coin that has seen its popularity rise over the past few days, has seen an abrupt price plunge over the past five days. PEPE price hit an all-time high of $0.000004354 on May 5 before dropping to $0.000001666 at press time.

The plunge has seen PEPE lose $1 billion from its total market cap according to on-chain data.

Why did the PEPE price rise in the first place?

A report by researchers from crypto fintech firm Matrixport found that the largest driver of the recent meteoric PEPE price action since its inception on April 14, 2023, seems to be from traders based in Asia.

According to the Matrixport report, buying activity during Asian trading hours contributed a staggering 3,657% of the total 9,071% rally witnessed between its launch and May 8.

Why is the PEPE price dropping now?

The Matrixport report also attributed the current sharp decline in PEPE price to traders selling large chunks of their PEPE holdings to new retail investors after the PEPE was listed listing on Binance, the world’s largest crypto exchange by daily trading volume.

In addition, Ethereum deposits following PEPE listing on various top crypto exchanges surged to highs never seen since November 2021. According to crypto market intelligence firm Santiment, the surge in ETH deposits is partly because of the early buyers of PEPE securing their profits by transferring their holdings by swapping their tokens for ETH on decentralized exchanges like 1inch and Uniswap.

However, there are reports that some of the well-known whales are still buying PEPE at a low price. For example, data from blockchain analytics firm Lookonchain shows that “Machi Big Brother,” the online persona of former tech entrepreneur Jeffrey Huang, has purchased a total of 73.4 ETH ($137,000) worth of PEPE over the past four days.