Meme coin mania is gripping the crypto industry, and Pepe token is leading the pack. Recent meme coin activities resulted in Ethereum deposits surging by 20,000 for the first time since November 2021. Sentiment, the blockchain analysis platform, argued that PEPE coin traders are looking to cash out profits from rallying coins could be a reason behind the increase in the number of active addresses.
Ethereum Active Deposits Increasing, Thanks to PEPE
This meme coin season began in May 2023, and at the same time, the number of active addresses started to climb. This volatile hype cycle is related to the economics of tokens like PEPE. A smart move by the traders is that they are trading them for sustainable assets like ETH.
Based on Pepe the Frog, PEPE, an ERC-20 token, was launched in April, and since then, over 410,000 PEPE transactions have been reported to be completed on Uniswap. Statistics say these transactions resulted in the burning of 5,300 ETH in gas fees. The number of gas fees burned by these started to climb from May 1, 2023, thereby increasing ETH deposits.
At press time, PEPE was trading at $0.000002445 with a drop of 4.70%, its market cap was down by 4.73% to $956 Million, and trading volume suffered by 39.76%, $884 Million. Ranking at number 49, PEPE shares a market dominance of 0.08%.
The ECR-20 token is now listed on the biggest crypto exchange on the planet and KuCoin. This listing could result in increased PEPE transactions, which would eventually lead to burning more gas fees. This process is expected to continue after the meme coin’s rally is disturbed.
The increased activities on the Ethereum network caused a hike in gas fees. This situation could have some consequences across the network. Reports show that there has been an upward momentum in gas fees since April 2023. On May 5, 2023, the gas fee was reported to be 240 gwei, the highest value since May 2022.
What Does this Indicate for Price Action at Ethereum?
According to previous trends, Sentiment argued that an increase in the activity on Ethereum deposits foreshadows volatility in ETH price. Logic states investors move idle Ether to exchanges to profit from meme coins rallies. This activity dramatically increases the supply and might cause fluctuations in the market.
If true, any surge in active ETH deposits might hint toward upcoming price volatility. Also, a significant movement can influence the supply and demand equilibrium. Recently the Ethereum Foundation transferred 15,000 ETH to a Kraken deposit address to inject liquidity into the market.
If historical patterns are studied, this increase in liquidity could negatively impact ETH prices.
At Press time, Ether traded at $1,869.41, dropping 1.77%. However, the value of Bitcoin increased by 0.59% to 0.06618 BTC. Market cap suffered by 1.82% to $224 Billion, and trading volume dipped by 9.69% to $8.07 Billion. At number 2, Ethereum shares a market dominance of 19.38%, with an ROI hike of 65,853.86%.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/05/08/pepe-conversions-drove-active-ethereum-deposits-to-18-months/