Will Prices Of Meme Coins Continue To Drop?

In the realm of meme coins, PEPE’s Network Realized Profit/Loss (NPL) metric has emerged as a critical barometer, shedding light on price trends within the cryptocurrency landscape.

This metric has now indicated a glimmer of a price floor for the frog-themed token that has been facing its fair share of challenges. As a result, a ray of positivity has dawned upon numerous investors who have been expecting a much-needed rebound, following a prolonged period of decline within the meme coins arena.

However, a more meticulous analysis of the situation unveils a contrasting reality, suggesting that the token’s woes might be far from over.

At first glance, the dip in PEPE’s NPL metric appeared to be an encouraging sign. Historically, a significant drop in this metric has often coincided with a price bottom in many cryptocurrencies. 

 PEPE NPL metric on the downward trend. Source: Santiment. 

PEPE’s Misleading NPL Dip Conceals Ongoing Selling Pressure

The recent uptick in PEPE’s 24-hour performance, with a 1.7% rally, seemed to lend credence to this belief. Nevertheless, deeper scrutiny of on-chain data reveals a less optimistic picture.

While the NPL suggested a potential price floor, the broader on-chain performance of PEPE contradicts this notion. The token has experienced consistent and sustained selling pressure.

PEPE seven-day slump. Source: Coingecko

Holders have continued to offload their tokens including meme coins, thwarting the possibility of a substantial price rebound. The 9.1% seven-day slump underscores the persistent challenges PEPE faces, casting doubt on the immediate potential for recovery.

Insights From The Broader Crypto Market Struggle

PEPE’s struggle is not occurring in isolation. The wider cryptocurrency market has been grappling with a plethora of challenges, including regulatory uncertainties, market sentiment shifts, and macroeconomic factors. The volatility that has become synonymous with the crypto landscape has impacted tokens across the spectrum, including well-established ones.

This backdrop of uncertainty has resulted in heightened caution among investors. The fear of further price drops, according to a recent PEPE price analysis, prompts them to liquidate their holdings preemptively, even when metrics like NPL seem favorable. This collective behavior contributes to the sustained selling pressure observed in tokens like PEPE, despite signs that might hint at a price recovery.

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