Crypto News: 611B PEPE Tokens Snapped Up by Potential Hacker Wallets—Should Investors Worry?

• A Tornado Cash-linked fund was deployed to buy 611 billion PEPE.
• This buyup can make or mar the memecoin depending on key actions made by the whale.

Market data provider Lookonchain has notified the crypto community about a potential hack involving the PEPE memecoin. On Tuesday, Lookonchain spotlighted five wallets possibly linked to a hacker who bought 611 billion PEPE tokens worth $4.28 million.

Are Hackers Buying PEPE Tokens?

In an X post, Lookonchain explained the situation about the recent PEPE buy. The platform linked the five wallets to a hacker because of an earlier transaction with the notorious cryptocurrency mixer Tornado Cash. 

Lookonchain posted data showing the five wallets withdrew Ethereum (ETH) from Tornado Cash about 15 days earlier. Tornado Cash is an Ethereum-based mixer that conceals crypto transaction trails using zero-knowledge proofs. Compromised funds are generally channeled through this platform, providing all users with anonymity.

Hackers use Tornado Cash to legitimize their source of funds by removing connections to a hacked wallet or malicious crypto activity. In addition to breaking the link between deposits and withdrawals, Tornado also groups all deposited funds in a shared pool. This means that any user withdrawing from Tornado Cash could inadvertently help a hacker to stay undetected.

The US government previously accused and sanctioned the service for helping to launder illegal funds. However, the US Treasury Department has officially lifted sanctions against Tornado Cash, as featured in our recent coverage.

According to market data, the PEPE token has declined more than 4.5% over the past 24 hours. This sharp decline follows the news of the potential hacker’s acquisition. If the actor decides to dump a large portion of their holdings, it may increase the supply of PEPE in the market, potentially decreasing its price.

PEPE Price Forecast

On April 9, the price of PEPE broke above the descending trendline (drawn by joining multiple highs since early December). The price soon corrected, and support was found on this trendline the next day. It rallied 11% until Saturday.

However, PEPE faced rejection around the 50-day EMA level of $0.0000078 on Sunday, followed by a 6% drop until Tuesday. At the time of writing, the price hovers at around $0.0000070.

PEPE could see more price drops if it closes below $0.0000064 daily. The price might drop to retest the March 11 low of $0.0000052. 

Meanwhile, the Relative Strength Index (RSI) shows PEPE consolidating around the neutral line of 50 on the daily chart. This reading indicates indecisiveness among investors and traders. If the RSI value moved below its neutral level, PEPE would fall further.

However, investors are still interested in accumulating the token, as evidenced by the uptick in daily trading volume by 1.53%.

In a recent update we covered, crypto Analyst Ali Martinez forecasted a 40% rally for PEPE. The analyst cited bullish trends, particularly an inverse head-and-shoulders pattern formed in early March.