The pepe token (PEPE), a new cryptocurrency in the market, has experienced frenzied trading activity recently, even surpassing more established memecoins like dogecoin (DOGE) and shiba inu (SHIB) in trading volumes. In the past 24 hours, the trading volumes of pepe surged to over $250 million, a figure boosted by a 100% price spike over the weekend. In comparison, dogecoin’s trading volumes stood at $225 million, while shiba inu’s volumes were significantly lower at $100 million.
Crypto exchange OKX recorded over $76 million in trading volumes for pepe tokens, followed by $43 million on decentralized exchange Uniswap. It is worth noting, however, that a large part of these volumes may be generated by automated bots continually buying and selling tokens to gain activity and liquidity, while pocketing small profits. Consequently, a single trade exceeding $100,000 can lead to a 2% dip in pepe prices on OKX. In contrast, dogecoin requires a trade of $800,000 to experience the same dip, given its higher market capitalization and overall liquidity.
While early pepe adopters are reaping profits, there are concerns about the behavior of investors who turned relatively small investments into substantial gains in a short time. One trader, for example, suffered a 40% slippage to exit their pepe position on Uniswap, successfully converting an ether (ETH), valued at $1,800 at the time, to over $3 million worth of pepe in just over two weeks. Another case involves an investor who turned a $1,200 investment into over $9 million within days of pepe’s issuance on the Ethereum blockchain.
Despite the selling pressure, with sellers offloading from one ether to over seven ethers worth of tokens, buying activity remains robust, suggesting that pepe is still in demand. Data shows 6,500 buys compared to 3,300 sells during the past 24 hours.
However, some are concerned that trading surrounding pepe tokens may not be as organic as it appears due to the potential influence of bots and the quick profits made by early investors. With an 18% decline in the past 24 hours, the sustainability and long-term viability of the pepe token remain open to question.
As the cryptocurrency market continues to evolve and expand, the surge in pepe token trading volumes serves as both an opportunity and a potential pitfall for new and experienced investors alike. The possibility of inflated trading volumes and rapid fluctuations in valuations calls for a cautious approach and careful consideration of such assets.
Source: Coindesk
