Pepe Coin Keeps on Giving, Despite Market Fears of 'Killer Whales'

Pepe Coin Keeps on Giving, Despite Market Fears of ‘Killer Whales’

Disclosure

Updated: 06 May 2023

The information provided on Inside Bitcoins is for educational and informational purposes only and should not be considered financial, investment, or trading advice. Cryptocurrency markets are highly volatile, and investing in digital assets carries significant risk. No profits are guaranteed, and you may lose some or all of your investment. Always invest responsibly and only with funds you can afford to lose.

Join Our Telegram channel to stay up to date on breaking news coverage

Despite predictions of an impending collapse from critics, the Pepe Coin (PEPE) has grown stronger over the past week. According to CoinGecko data, the coin has gained almost 500% in the last two weeks.

A number of whales, who are individuals or groups holding significant quantities of any token, purchased PEPE in the hours after it was first issued in mid-April. This led to skeptics issuing warnings of a collapse. Shorters have now lost millions of dollars as PEPE’s market capitalization jumps to nearly $900 million.

🎢🐸🐸🎢

Our new $PEPE perpetual swap listings are now LIVE on BitMEX

You can now long or short $PEPE $USD and $PEPE $USDT …with up to 50x leverage + the best risk limits in the industry. Trade now

BTC marginedhttps://t.co/R5lOu4r8Zw

USDT margined https://t.co/oPDq5AJVuM pic.twitter.com/dmSkNTfpkB

— BitMEX (@BitMEX) May 3, 2023

As a result, short interest has boomed among future traders, according to reports. Shorts are bets against the price of a token. Negative funding rates in perpetual futures tied to the token have shown the dominance of bearish positions in the derivatives market. This means that shorts are dominant and will pay longs to keep their bearish bets open.

PEPE’s Price Increase Leads to Huge Losses

However, an 80% price increase in the past 24 hours has led to outsized losses for these traders. CoinGlass data reveals that shorts against PEPE lost at least $11 million on several exchanges over the past 24 hours. Traders on the crypto exchange OKX alone lost $5.5 million, the highest figure among counterparts.

Traders lost another $2.2 million on Huobi and some $3.6 million on Bybit. In addition, traders lost a few hundred thousand dollars on BitMEX. All these exchanges started offering Pepe futures trading in the past week.

Pepe losses were third to only Bitcoin (BTC) and Ether (ETH) futures liquidations, which usually rack up the highest futures losses. Liquidation refers to when an exchange forcefully closes a trader’s leveraged position because of a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position and has insufficient funds to keep the trade open.

Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly. However, with the volatility of PEPE and the large losses incurred by shorters, the risk of trading such tokens is clear.

Community Support Contributes to PEPE’s Success

PEPE’s success has been attributed to its large community of supporters, who have actively been promoting the token on social media platforms. The community has leveraged platforms such as Twitter and Reddit. The token is named after the popular meme character Pepe the Frog and has been described as a decentralized alternative to Dogecoin.

Despite its recent success, investors should approach PEPE with caution because of its volatility and the risks involved in trading such tokens. It is crucial to conduct thorough research before investing and only invest money that one can afford to lose.

PEPE’s rapid increase in value has resulted in significant losses for shorters. The token’s success has been attributed to its large community of supporters and its decentralized nature. However, investors should be cautious when trading such volatile tokens and only invest money that they can afford to lose.