In-depth analysis

1. Security incident (Downward impact)

Overview:
The PEPE website was compromised on December 4 and 5, 2025, with the injection of malicious code Inferno Drainer to redirect users to phishing sites. Blockaid confirmed the attack and advised users to avoid the platform until the issue is resolved (Bitcoinist).

Consequences:
- Erosion of trust: Memecoins heavily depend on the opinion of their community; security flaws amplify fear, uncertainty, and doubt.
- Liquidity risks: Exchanges like KuCoin and Binance have issued warnings, which could reduce trading activity.

To watch:
- Official response from the team and timeline for resolving the vulnerability.

2. General market pullback (mixed impact)

Overview:
The total market capitalization of cryptocurrencies has dropped by 3.3% (3.04 T$ → 2.94 T$), with Bitcoin dominance reaching 58.7% as capital has shifted towards safer assets.

What it means:
- Weakness of altcoins: The drop of PEPE (-8.58%) was more pronounced than that of ETH (-2%) and SOL (-4%), reflecting the high beta nature of memecoins.
- Liquidity shortage: The volume of derivatives has decreased by 14.2%, reducing speculative interest in riskier tokens.

To watch:
- Bitcoin price movement: A rebound in BTC could stabilize altcoins.

3. Technical analysis (Bearish impact)

Overview:
PEPE has broken below its 7-day SMA ($0.00000457) and 30-day EMA ($0.00000509), with an RSI (45.7) signaling bearish momentum.

Explanations:
- Algorithmic selling: Traders often sell automatically when key moving averages are broken downward.
- Fibonacci levels: The 23.6% retracement ($0.00000579) now acts as resistance.

Elements to watch:
- A close above $0.00000450 could signal short-term stabilization.

Conclusion

The drop in PEPE's price reflects a combination of project-specific risks (security breach) and unfavorable macroeconomic factors (Bitcoin dominance, fear climate). While the direct financial impact of the hack seems limited, the damage to the project's reputation could prolong selling pressure.

Key point to watch: Can PEPE maintain the psychological support of $0.00000400, or will Bitcoin dominance push it towards annual lows ($0.00000397)?$PEPE