PEPE risks a deeper correction as whales sell 80 billion tokens

Key takeaways

• PEPE is currently trading around $0.00000348 following a failure to break past its 200-day EMA.
• Large-scale investors holding between 10 million and 100 million PEPE have unloaded roughly 80 billion tokens since August 25.
• Dropping below the $0.00000313 threshold could spark a deeper sell-off down to $0.00000230.

The meme coin Pepe (PEPE) faced persistent downward pressure on Thursday, hovering near $0.00000348 after failing to clear a major resistance barrier.

On-chain metrics reveal that major holders are shrinking their exposure, which could intensify short-term selling pressure. This distribution, coupled with mixed signals in the derivatives market and fading technical strength, leaves the token vulnerable to a more pronounced pullback.

Large Holders Take Profits Following Mid-August Surge

According to Supply Distribution metrics from Santiment, prominent PEPE holders have started realizing gains after the asset’s strong performance in the middle of August.

Specifically, addresses holding between 10 million and 100 million PEPE have divested about 80 billion tokens since August 25, pointing to profit-taking among high-net-worth investors. During this same timeframe, retail and mid-tier wallets holding 100,000 to 10 million PEPE absorbed a combined 5.06 billion tokens.

Because this retail accumulation represents only a tiny fraction of the volume sold by whales, the massive supply imbalance is likely to hinder any quick recovery and keep prices suppressed.

Meanwhile, the derivatives market is sending mixed signals. On Thursday, PEPE’s long-to-short ratio reached 1.05, near a multi-week high. This reading above 1 indicates a slight bias toward long positions, showing that a majority of futures traders are still betting on an upward move.

Conversely, funding rate trends suggest a more bearish reality. The open-interest-weighted funding rate for PEPE dipped into negative territory on Wednesday and slid further to -0.0067% by Thursday.

Since negative funding rates mean short sellers are paying long traders to keep their positions open, this shift highlights growing bearish sentiment that directly contradicts the optimistic long-to-short ratio.

Technical Resistance at the 200-Day EMA Halts PEPE’s Progress

PEPE consolidated around $0.00000348 on Thursday after a failed attempt to breach its 200-day exponential moving average (EMA) at $0.00000364 the day before.

This rejection underscores the importance of the 200-day EMA as a key resistance level that buyers must clear to shift market momentum back in their favor.

Momentum indicators suggest that bullish energy is depleting. The Relative Strength Index (RSI) is trending downward toward the neutral 50 mark, signaling that previous upward momentum is evaporating. Additionally, the Moving Average Convergence Divergence (MACD) indicator triggered a bearish crossover last week that remains active, further validating the threat of continued downside.

On the downside, the 50-day and 100-day EMAs offer a preliminary cushion near $0.00000320, followed by a critical horizontal support level at $0.00000313.

If PEPE closes a daily candle below $0.00000313, it could validate a broader correction, potentially driving the price down 34% to its next major support floor at $0.00000230. On the other hand, invalidating this bearish thesis requires a daily close above the 200-day EMA at $0.00000364. Achieving this breakout could pave the way for a rally toward the next horizontal resistance level at roughly $0.00000442.