When it comes to meme coins, PEPE has undoubtedly been one of the best performers in the last year. The meme coin reached an all-time high after an all-time high in 2024, eventually crossing the $5 billion market cap. The rapid rise in price was followed by a surge in the open interest of the meme coin at the time. However, with time, the open interest has seen a notable decline, both in price and in open interest, but this could be good news for the PEPE meme coin.
PEPE Open Interest Down 72%
In the middle of 2024, the PEPE price rose quickly as the crypto market rebounded. This rise to new all-time high levels also meant that interest in the meme coin was rising rapidly and the result was the PEPE open interest actually touching a new all-time high of its own.
Related Reading
According to data from the Coinglass website, in May 2024, the PEPE price rose to its current peak of $0.000017, while the open interest reached a new high of $794.77 million. However, bulls lost momentum at this level as the shooters took over the crypto market. Over the next few months, the PEPE price declined, as did the open interest.
By August, the PEPE open interest dropped to levels not seen since April 2024, meaning new 4-month lows. The open interest went from almost $800 million to as low as $215 million. Since then, there has been some recovery in the open interest, but it has remained shaky.
The drop to August lows meant that the open interest had fallen as much as 72% from its peak. However, around this time, the PEPE price has fallen only around 55% from its peak, going from $0.000017 to as low as $0.000007.
Is This Good News?
The drop in open interest in the PEPE meme coin does signal a decline in bullish sentiment among investors. It means that investors are more willing to bet on the price of the meme coin going down rather than going up, which could mean mounting selling pressure on the coin.
Related Reading
However, times like these can often turn out to be bullish for a cryptocurrency’s price. This is because when investors are the most bearish, the odds of a reversal are higher, taking the shorter by surprise. Given how much the open interest has fallen, it would come as no surprise if there was a short squeeze, flushing bears out of the market.
If this happens, then the PEPE price could see a quick recovery from here. Naturally, as the open interest begins to rise, so would the price, given their positive correlation so far.
Featured image created with Dall.E, chart from Tradingview.com
