However, a more meticulous analysis of the situation unveils a contrasting reality, suggesting that the token’s woes might be far from over.
At first glance, the dip in PEPE’s NPL metric appeared to be an encouraging sign. Historically, a significant drop in this metric has often coincided with a price bottom in many cryptocurrencies.
PEPE NPL metric on the downward trend. Source:
PEPE’s Misleading NPL Dip Conceals Ongoing Selling Pressure
The recent uptick in , with a 1.7% rally, seemed to lend credence to this belief. Nevertheless, deeper scrutiny of on-chain data reveals a less optimistic picture.
While the NPL suggested a potential price floor, the broader on-chain performance of PEPE contradicts this notion. The token has experienced consistent and sustained selling pressure.
PEPE seven-day slump. Source: Coingecko
Holders have continued to offload their tokens including meme coins, thwarting the possibility of a substantial price rebound. The 9.1% seven-day slump underscores the persistent challenges PEPE faces, casting doubt on the immediate potential for recovery.
Insights From The Broader Crypto Market Struggle
PEPE’s struggle is not occurring in isolation. The wider cryptocurrency market has been grappling with a plethora of challenges, including regulatory uncertainties, market sentiment shifts, and macroeconomic factors. The volatility that has become synonymous with the crypto landscape has impacted tokens across the spectrum, including well-established ones.
This backdrop of uncertainty has resulted in heightened caution among investors. The fear of further price drops, according to a recent , prompts them to liquidate their holdings preemptively, even when metrics like NPL seem favorable. This collective behavior contributes to the sustained selling pressure observed in tokens like PEPE, despite signs that might hint at a price recovery.
The market cap of cryptocurrencies reached $1.12 trillion today. Chart:
PEPE And Meme Coins: The Road Ahead
While the dip in PEPE’s NPL initially raised hopes of a price bottom, a meticulous analysis uncovers the underlying challenges that continue to suppress the token’s recovery. The on-chain data reflects a consistent trend of token holders selling, which overshadows the potential for an immediate price rebound. Moreover, the further exacerbate the situation, making it crucial for investors to manage their expectations.
While metrics like NPL provide insights, they must be viewed within the larger context of market dynamics. Only by taking a holistic approach and considering multiple factors can investors make informed decisions that mitigate risks and capitalize on opportunities in this highly volatile environment.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from Earth.com
