PEPE Price Faces Challenges as Whale Activity Drops, Breakout in Doubt

PEPE price has noted a not-so-impressive 11% rise in four days, which, despite being a positive development, is minimal compared to the meme coin’s past candles.

The reason behind this slow growth is the declining participation of the whales. All in all, this makes the meme coin a disappointing investment option.

Even Whales Are Pulling Back From PEPE

PEPE price is expected to break out of the descending wedge and rally, but this could be challenging for two reasons. One is the lack of incentives for new investors, and the second is the receding activity of large wallet holders.

The Sharpe Ratio, which measures the risk-adjusted return of an asset, for the PEPE meme coin currently stands at 0.3. Although this figure is positive, it is relatively low, indicating that the coin’s returns are not particularly strong when adjusted for the risks involved. This suggests that investors may not be adequately compensated for the level of risk they are taking with PEPE.

Read more: Pepe: A Comprehensive Guide to What It Is and How It Works

PEPE Sharpe Ratio. Source: TradingView

In addition to the underwhelming Sharpe Ratio, there has been a notable decline in the participation of PEPE whales. These large holders play a crucial role in influencing PEPE’s price and overall market activity. However, their reduced involvement could signal a shift in market sentiment or a loss of confidence in the coin’s near-term prospects.

The decline in whale activity is further reflected in the significant drop in PEPE’s average daily trading volume. Over the span of just one week, the volume plummeted by 60%, falling from $83 million to $33 million. This sharp reduction in trading activity could lead to increased price volatility and make it more challenging for PEPE to sustain any potential rallies.

PEPE Large Transaction Volume. Source: IntoTheBlock

Overall, the combination of a low Sharpe Ratio and decreased whale participation paints a concerning picture for PEPE’s short-term outlook.

PEPE Price Prediction: Surprise Increase Ahead?

PEPE price is trading at $0.00000811, having breached the resistance at $0.00000775. A bounce off this newly formed support level could help the meme coin continue its uptrend. The crypto asset’s target is still flipping $0.00001007 into a support floor post-breakout from the descending wedge.

While this could lead to a potential 80% price rise, it may not happen. The aforementioned cues do not support a bullish outcome, leaving the PEPE price stranded under $0.00001007.

Read more: Pepe (PEPE) Price Prediction 2024/2025/2030

PEPE Price Analysis. Source: TradingView

But if the meme coin successfully breaks out due to a change in investors’ tone, it could initiate recovery. Even if PEPE does not note an 80% rise, a breach of $0.00001146 would also invalidate the bearish thesis.

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