Pepecoin (PEPE), once an extremely profitable memecoin, has plunged by more than 80% four months after its record high. Now, technicals suggest that the memecoin could be at risk of even bigger losses in the coming weeks or months.

Pepecoin faces rug pull allegations

On Aug. 24, several rogue Pepecoin developers changed the number of signatures required to move tokens from their multisig wallet from five out of eight to two out of eight. Then, they sent $16 million worth of PEPE to crypto exchanges, suggesting they wanted to sell.

A segment of market analysts viewed these moves as a hint of an impending “rug pull,” raising fears that the PEPE price may crash to zero in 2023. 

MULTI, the native token of Multichain’s cross-chain bridging protocol, dropped nearly 98% from its peak. The decline has appeared partially due to allegations that Multichain’s $125-million hack in July 2023 was part of a broader rug-pull scam.

Similarly, in July 2023, a crypto developer associated with the Encryption AI project committed a $2-million rug-pull fraud. As a result, the Encryption AI token, 0XENCRYPT, crashed 99% to an all-time low of $0.02.

PEPE’s price paints deadly descending triangle

Market analyst Nebraskangooner suggests that PEPE’s price could soon plunge to near zero due to a descending triangle formation on the four-hour chart.

In finance, a descending triangle is a bearish continuation pattern characterized by the simultaneous formation of a falling trendline resistance and horizontal trendline support. It resolves after the price decisively breaks below the support and falls by as much as the triangle’s maximum height.

This puts the bearish target for PEPE’s descending triangle at nearly zero.

PEPE hopefuls buy the dip

On a brighter note, some PEPE investors have used the token’s price decline as an opportunity to buy the dip. Notably, the supply held by entities with a balance between 10,000 and 100,000 PEPE tokens has jumped substantially since Aug. 27.

PEPE supply distribution. Source: Santiment

This accumulation is underway as Pepecoin hopefuls assert that the market can absorb any further selling pressure from the token devs. 

“The @pepecoineth devs used to hold 6% of the $pepe and sold 16T tokens equaling 4% of the supply,” noted Kenobi, a PEPE investor, adding:

“No other wallet (besides exchanges) hold more than 0.9% of the supply, except the #pepe dev wallet which now holds 2% This is long-term bullish for $pepe. SELL THE REMAINNG 2%!!!”

Technically, PEPE has been trading near a recognized accumulation area around $0.00000085 that witnessed a 120% price rally during the June–July 2023 session. Thus, chances of a market rebound at this level are high, given PEPE’s oversold relative strength index.

PEPE/USDT daily price chart. Source: TradingView

If PEPE’s price bounces here, then the next upside target comes to be its 50-day exponential moving average (the red wave) near $0.00000121 in 2023, up around 45% from the current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.