Whale Buying and Market Speculation
Recent market news has been abuzz with big whales accumulating PEPE. Lookonchain data reveals a surge in holdings by several whale addresses, with one address (Oxa4Fd) splashing a whopping $1.09 million USDC to acquire 123.66 billion PEPE at a price of $0.00000881. This aggressive buying spree has ignited speculation within the market – will PEPE price skyrocket in the near future?
However, a closer look reveals that whale buying alone isn't a guaranteed recipe for a price surge. Given the now deserted crypto market, news of whale activity, while stirring some interest, might not necessarily translate to a significant price increase. In fact, it could introduce further short-term risks.
A Broader Market View and PEPE's Anomaly
Since April, the overall cryptocurrency market has been in a correction phase, extending its lackluster performance into May. When the broader market fails to gain traction, it's difficult for meme coins to experience significant price hikes. Popular meme coins like SHIB, DOGE, WIF, and BOME have all shed roughly 50% since reaching their highs in March and April of this year.
Interestingly, PEPE price seems to be defying the trend. While its price did peak at 0.000009977 in March, it experienced a decline similar to other meme coins, dropping by as much as 50%. However, unlike its peers, PEPE's price started a swift recovery in April. Currently, it sits at 0.00000881, a mere 10% dip from its 2024 high. This price behavior deviates significantly from the expected trajectory of a mainstream meme coin in the current market climate.
One possible explanation for this anomaly lies in the Ethereum restaking craze that gripped the market in April. A surge in investors buying Ethereum to participate in restaking could have motivated whales to hype up the trend and then shift their funds to PEPE in an attempt to squeeze out the last profits from the Ethereum-based meme coin market. If this scenario holds true, then PEPE's price faces substantial risk.
Further bolstering this risk assessment is PEPE's current MVRV Z-score, which surpasses 4. Generally, a score exceeding 3.5 indicates a high-risk zone, suggesting that PEPE's price is already quite vulnerable.
PEPE Price's Potential and Prediction
While the PEPE price faces elevated risks at present, it doesn't render the coin entirely worthless, and PEPE remains an attractive option for potential investors. However, securing an advantageous entry point is crucial. Should PEPE experience a price correction in the future, investors might consider buying at a lower price point. Starting from a hypothetical price of $0.000005, PEPE could still see a significant 10x price increase within the year.
Conclusion
The recent surge in whale buying of PEPE has sparked speculation about a potential price boom. However, a closer examination reveals a more nuanced picture. The overall market slump and PEPE's unusual price behavior suggest that whale activity alone might not be enough to trigger a significant price increase. Additionally, PEPE's high MVRV Z-score indicates substantial risk.
Despite the current challenges, PEPE still holds potential as a good meme coin investment. However, investors are advised to exercise caution and prioritize finding the right entry point. By waiting for a potential price correction, investors could position themselves for significant returns if PEPE's price rebounds.
