Pepecoin (PEPE) has experienced a significant decline in price, dropping by almost 85% from its all-time high in May 2023. The bearish momentum is expected to continue throughout the month of September. This decline can be attributed to two major security breaches that have occurred recently, causing concerns among investors and affecting market sentiment.
On August 24, members of Pepecoin’s founding team executed a questionable move by transferring $16 million worth of PEPE tokens to exchanges with the intention of potentially selling them. This action raised suspicions within the community and led to fears of a “rug pull scam.” As a result, the price of PEPE experienced a significant decline of 30%, indicating a loss of confidence in the project.
Second Security Breach: Hacked Telegram Channel
Adding to the growing concerns, Pepecoin’s official Twitter handle confirmed on September 9 that their accredited Telegram channel had been hacked by an anonymous entity known as “lordkeklol.” This breach further undermined investors’ trust in the project, resulting in a 12% drop in the price of PEPE. These consecutive security breaches have had a detrimental impact on the overall confidence and sentiment surrounding the memecoin project.
Investor Exodus and Supply Distribution
The departure of significant investors can be observed through the analysis of Pepecoin’s supply distribution data. Notably, addresses holding a balance between 100 million and 1 billion PEPE tokens control approximately 96.5% of the maximum circulating supply. As concerns regarding the “rug pull” escalated, the supply held by this particular group of investors has significantly decreased. This departure of substantial holders, commonly referred to as whales, has the potential to further erode buying sentiment within the PEPE market.
From a technical standpoint, Pepecoin appears to be trading within a descending triangle pattern, signaling a downward trend. This pattern is generally considered to be a bearish continuation pattern. The resolution of this pattern occurs when the price breaks below the lower trendline, resulting in a drop that is typically equivalent to the height between the upper and lower trendlines of the triangle. Taking into account this technical setup, PEPE price is at risk of falling to $0.00000064 in September 2023, reflecting a decrease of approximately 12% from its current levels.
Pepecoin’s recent price decline and bearish momentum can be attributed to the security breaches it encountered. The actions of the rogue founding team members and the hacking of the project’s accredited Telegram channel have significantly eroded investors’ confidence in the memecoin project. Additionally, the departure of significant investors has further contributed to the negative sentiment surrounding PEPE. From a technical perspective, the descending triangle pattern indicates a potential further decline in PEPE price. As the project navigates these challenges, it will be crucial to rebuild trust and address the security concerns in order to regain investor confidence and stabilize the market.
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