Key Highlights
- Canary Capital submitted an S-1 form to the SEC on Wednesday for a spot PEPE exchange-traded fund
- The memecoin’s value decreased 4.58% on Wednesday, continuing its downward trajectory into Thursday below $0.0000036
- Trader positioning showed a long-to-short ratio falling to 0.81, marking the lowest point in more than 30 days
- Funding rates entered negative territory at -0.0081%, indicating short sellers are compensating long position holders
- The token maintains a $1.5 billion market capitalization with a circulating supply exceeding 420 trillion units
Canary Capital submitted regulatory paperwork to the U.S. Securities and Exchange Commission this Wednesday, proposing a spot exchange-traded fund that would track the performance of PEPE, the frog-inspired memecoin that debuted in April 2023.
The regulatory filing failed to provide upward momentum for PEPE’s valuation. The digital asset experienced a 4.58% decline on Wednesday, with the downturn extending into Thursday as the token traded beneath the $0.0000036 threshold.
Canary Capital has established itself as an aggressive player in the memecoin ETF sector. The investment firm previously submitted applications for exchange-traded funds tracking MOG and Pengu, positioning itself among the few asset management companies pursuing regulatory approval for meme-based cryptocurrency funds.
The documentation acknowledges that PEPE serves no functional purpose beyond speculation, with a maximum token count surpassing 420 trillion units.
Approval of this ETF would provide mainstream investors with PEPE exposure through traditional brokerage accounts, eliminating the need for direct token custody. Such approval could enhance market liquidity and bring institutional credibility to the asset, though these potential benefits remain contingent on regulatory clearance.
Market Data Reveals Bearish Momentum
Blockchain analytics from CryptoQuant indicate uncertain conditions with emerging bearish signals. Derivatives market activity suggests sellers currently maintain control.
CoinGlass data shows PEPE’s long-to-short ratio declined to 0.81 on Thursday, representing the weakest reading in over 30 days. Ratios beneath 1.0 indicate traders are predominantly positioning for downward price movement.
Funding rates transitioned into negative territory, registering -0.0081% on Thursday. Negative funding rates occur when short position holders compensate those holding long positions, reflecting bearish derivative market sentiment.
Analysts noted significant whale activity across both spot and futures trading venues, though this observation provides limited optimism against prevailing cautious market sentiment.
Critical Price Thresholds
PEPE momentarily surpassed its 50-day Exponential Moving Average at $0.0000036 on Tuesday, recording gains exceeding 11%. The token failed to sustain this elevation and retreated the following session.
Continued downward movement would bring the next significant support level at Tuesday’s trough of $0.0000033 into focus. Penetration below this threshold could drive PEPE toward the February 6 floor of $0.0000031.
The Relative Strength Index on the daily timeframe stands at 50 with a downward trajectory, indicating diminishing buying momentum. The MACD indicator maintains a bullish crossover pattern established last week.
As of Wednesday at 5:49 p.m. ET, PEPE was changing hands at $0.0000036 with a market capitalization of $1.5 billion.
