Pepecoin Becomes Biggest Meme Coin Gainer With 70% Weekly Jump
The tokens racked up $800 million in trading volumes over the past 24 hours, data shows.
Jun 22, 2023 at 4:25 p.m. UTC
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Takeaways:
- Pepecoin (PEPE) has seen a huge gain this week amid a broader crypto rally, outperforming other meme coins like SHIB, FLOKI and DOGE.
- Futures products tied to PEPE saw unusually large liquidations, suggesting short covering – or traders exiting bearish bets on the meme coin's price – might be exaggerating the size of the gain.
Pepecoin (PEPE) surged as much as 40% in the past 24 hours to extend weekly gains to over 70% amid a market-wide rally led by bitcoin (BTC).
Trading volumes for the frog-themed tokens jumped to over $800 million, CoinGecko data shows, as a risk-on environment likely fueled outsized bets on riskier assets, such as altcoins and meme coins.
PEPE gains were significantly higher than meme tokens shiba inu (SHIB), floki (FLOKI) and dogecoin (DOGE) – even as developers of some of these tokens introduced ecosystem upgrades – suggesting high buying interest for pepecoin.
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Futures contracts tracking PEPE had more than $13 million of liquidations. Potentially, this may have contributed to the price spike as short positions – or bets that the price of PEPE would fall – were settled. Only bitcoin (BTC) and ether (ETH) futures liquidations have been greater.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Large liquidations can signal a top or bottom of a steep price move, which may allow traders to position themselves accordingly.
As such, funding rates in perpetual futures tied to PEPE futures remain negative, indicating the dominance of bearish positions in the derivatives market. A negative funding rate indicates that shorts are dominant and are willing to pay longs to keep their bearish bets open.
Bitcoin crossed the $30,000 mark on Wednesday amid a flurry of Bitcoin ETF filings by traditional finance players in the U.S., which likely spurred bullish sentiment among traders and led to a market-wide rally.
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Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.