The PEPE coin, one of the largest meme coins by market cap, is showing signs of renewed investor interest.
This comes amid a broader rise in Ethereum (ETH), driven by institutional flows and corporate adoption.
How Ethereum's rise can boost PEPE's price
PEPE is considered the best performing large meme coin today and this week, showing resilience despite volatile conditions.
In the past 24 hours, PEPE's price has risen by about 10%, outperforming sector peers like Dogecoin (DOGE), Shiba Inu (SHIB), and Bonk Inu (BONK), among others.
The frog-themed meme coin is attracting positive sentiment from the Ethereum market, as the largest altcoin by market cap is currently rising towards new levels.
Being a meme coin built on Ethereum, capital flows from the ETH market to lower market cap tokens on its blockchain, with PEPE attracting the most attention.
Analysts say that PEPE is strongly backed by Ethereum after a record week for ETH ETFs (exchange-traded funds). On August 11, Ethereum ETFs surpassed the $1 billion mark in net flows, led by BlackRock's ETHA.
This achievement reflects a significant shift in traditional finance's (TradFi) perception of Ethereum as an asset with an increasing role in decentralized finance (DeFi), web 3 infrastructure, and smart contracts.
This increase in institutional demand has led analysts to call it an ETH accumulation wave, a trend that could have significant benefits for meme coins built on Ethereum like PEPE.
According to year-to-date (YTD) data, PEPE has maintained a strong price correlation of 0.76 with Ethereum. This suggests that any significant rise in ETH could fuel a surge in PEPE.
The base of holders is growing despite the price decline
Interestingly, PEPE's fundamentals have strengthened in 2024 even though its price has halved since January. PEPE wallet addresses have grown by 25% this year, indicating continued interest from retail even during downturns.
The technical background also supports bulls in PEPE. Since the beginning of the year, PEPE has formed a symmetrical triangle pattern, a technical formation or chart pattern often associated with an impending price expansion.
At the same time, despite improved sentiment, risks remain. On-chain data reveals that the top 10 PEPE wallets control over 37% of the total supply. This raises concerns about potential price manipulation or sudden sell-offs.
Large holder concentrations, such as 94% of Trump and Melania tokens held by only 40 wallets, are a recurring challenge in meme coin systems. This happens because liquidity can disappear quickly if a few large players decide to exit.
With the Ethereum ETF market heating up and institutional demand increasing, the stage may be set for PEPE to capitalize on the momentum.
If Ethereum continues to rise and technical patterns emerge, PEPE could see a sharp increase in the coming weeks.
However, investors should conduct their own research, including monitoring whale wallet activity, being aware that sentiment can reverse as quickly as it rises in meme coin markets.