The memecoin mania that choked the Bitcoin network last week appears to have subsided. Furthermore, the popular frog-themed PEPE memecoin has dropped 60% since its high earlier this month.
On May 5, PEPE rose from obscurity to an all-time high of $0.00000431. However, it has now dropped by more than 60% to the current pricing of $0.00000172. Memecoin is down 4.5% on the day, while the markets are up 1.7%. This indicates that memecoin fever has passed for the time being.
The coin’s market value peaked at $1.6 billion before falling to roughly $720 million today.
Speculators frequently sell some of their BTC and ETH holdings in exchange for high-risk memecoins. This appears to be the case recently, as the top two have retreated after several months of increases, according to Bloomberg.
Kyle Doane, a trader at digital asset manager Arca, commented on PEPE, saying, “At the end of the day, it’s a lottery ticket,” before adding, “That type of trading is basically a centralized casino.” The memecoin mania may indicate a local market top, which is frequently followed by multi-month drawdowns for Bitcoin and its peers. In May 2021, Dogecoin (DOGE) lead the memecoin rise in a similar circumstance.
“When the buzz fades and the hype fades, the value tends to plummet, and investors can suffer significant losses,” said Joe Rotunda, director of the Texas State Securities Board’s enforcement division.
Cashing out memecoins can also be difficult owing to liquidity concerns. However, PEPE still maintains a daily trading volume of roughly $360 million. Now that the viral coin-minting frenzy has subsided, the Bitcoin network has taken a breather. As transaction costs settle, the number of pending unconfirmed transactions in the mempool has decreased to 242,837.
According to BitInfoCharts data, daily transactions continue robust, exceeding 600,000 per day. Fortunately, the average transaction charge has returned to roughly $3.76. Fees increased to more over $30 on May 8 as demand for block space rose during the peak of the BRC-20 and Ordinal inscription mania. During the Monday morning Asian trading session, Bitcoin prices were up 1.4% on the day at $27,191.
