Meme-inspired cryptocurrency PEPE PEPE$0.0₅9604 is under pressure after slipping below a key support level, sparking warnings of a possible 15% drop.

The move comes as trading volumes fell to $980 million and open interest contracted 4% to $535 million based on CoinGlass data, signaling waning conviction among traders.

Derivatives data show long liquidations hit $326,000, far outpacing just $9,900 in shorts, based on the same data source, highlighting an imbalance that could accelerate downward momentum.

Meanwhile, activity on the PEPE network has collapsed to fewer than 3,000 daily active addresses, Glassnode data shows. That’s a sharp drop from late 2024, when a peak 27,500 addresses were active during a major price rally.

According to trader Alpha Crypto Signal, the price of PEPE could see a major breakdown and slow towards the $0.0000085 to $0.0000080 area as it comes off of a symmetrical triangle.

Meanwhile, Nansen data for the past week shows the top 100 PEPE addresses on the Ethereum blockchain added just 0.2% to their holdings, while PEPE on exchanges rose 1.13%.

Technical Analysis Overview

PEPE showed volatility during the latest trading cycle, with a 5% range between $0.000010028 at the high and $0.000009567 at the low, according to CoinDesk Research’s technical analysis data model.

A rally earlier in the week briefly pushed prices to the $0.000010000 mark on volume of 2.6 trillion tokens, but the move stalled and sellers regained control.

Since then, the token has drifted lower, testing $0.000009610, a 4% pullback from recent highs. Hourly trading also showed resistance forming near $0.000009640 despite sharp volume spikes above 89 billion, suggesting distribution rather than accumulation.

More than 30 years ago, the advent of the internet began captivating the attention of everyday investors. Over these three-plus decades, investors have often had a next-big-thing trend to chase after. At the moment, nothing is garnering more attention than the evolution of artificial intelligence (AI).

When most investors think about AI, semiconductor titan Nvidia probably comes to mind — and for good reason. Nvidia’s graphics processing units (GPUs) have become staples in high-compute data centers. Its Hopper and successor Blackwell GPUs are powering split-second decision-making, generative AI solutions, and the training of large language models, such as chatbots and virtual agents.

But the argument can be made that Nvidia’s time atop the AI pedestal is over, with AI-driven data-mining specialist Palantir Technologies (PLTR 1.62%) dethroning it. Palantir stock has gained nearly 2,000% since 2023 began, and its market cap has grown to $317 billion, as of the closing bell on July 3. It went from a company tech investors somewhat followed to being one of the most-influential tech businesses in the world.

Palantir’s success has been fueled by the irreplaceability of the services it offers. Its Gotham platform aids federal governments with data gathering and analysis, as well as military mission planning and execution. Meanwhile, Foundry is relied on by businesses to make sense of their data and streamline their operations. With no one-for-one large-scale replacements for Palantir’s AI- and cloud-based software-as-a-service (SaaS) model, its operating cash flow is highly predictable and secure.

Furthermore, Palantir made the turn to recurring profitability well ahead of Wall Street’s consensus expectation. Maintaining a rapidly growing moat and validating its competitive edge with recurring profits is a quick way to win over Wall Street and investors.

But what if Palantir’s momentous run-up is nothing more than a short-lived FOMO (fear of missing out) event? While this opinion will undoubtedly be unpopular given the riches this company has bestowed on shareholders since 2023 began, there are seven valid reasons to believe Palantir stock can plunge 60%, if not more.

1. Next-big-thing technologies always endure bubbles

One of the biggest challenges for Palantir Technologies is that investors have a terrible habit of overestimating how quickly a game-changing innovation will gain utility and be adopted by businesses and/or consumers.

Including the internet, every next-big-thing technology for more than three decades has endured a bubble-bursting event. This is to say that every innovation has needed time to mature. With most businesses not generating a positive return on their AI investments, nor optimizing their deployed AI solutions, it’s a fair assumption that AI is walking down the same path as prior game-changing technologies.

While the multiyear government contracts (via Gotham) and subscriptions (via Foundry) Palantir has earned should keep its sales from plunging if the AI bubble bursts, it’ll do nothing to save the company’s stock from a wave of negative investor sentiment.

2. Gotham’s ceiling is lower than investors realize

To date, Gotham has been the operating platform responsible for driving Palantir’s profits and its annual growth rate that typically range between 25% and 35%. Having the U.S. government in its corner has undeniably been a positive.

However, Gotham’s client pool is rather limited. Since it provides data collection and military mission planning/execution, Palantir’s flagship SaaS model isn’t available to China, Russia, and a laundry list of other countries that aren’t bona fide allies of the U.S. This significantly lowers Gotham’s long-term ceiling more than investors probably realize.

3. The Trump administration’s focus on government efficiency is worrisome

For defense-oriented businesses, there’s usually no better scenario that a unified Republican government. Historically, the GOP has favored aggressive defense spending, which plays right into the hands of Palantir’s Gotham platform. President Donald Trump has previously noted the need to keep domestic AI innovations protected.

But Trump’s campaign promise has also been to make Washington, D.C., more efficient. Though the president has been supportive of defense companies in the past, there’s little guarantee that the Trump administration won’t aim to reduce federal spending in the future. There’s also little visibility of what defense spending might entail beyond Trump’s four years in office.

4. Palantir’s earnings quality is poor

A public company that’s added more than $300 billion in market cap over the last 30 months should be absolutely crushing it from a fundamental standpoint. With Palantir shifting to recurring profitability, the expectation is that rapid sales growth in Gotham and Foundry is powering its net income higher. Yet this isn’t the complete story.

Last year, 40% of Palantir’s $489.2 million in pre-tax income was traced back to interest income on its cash. During the first three months of 2025, 23% of the company’s pre-tax income came from interest on its cash. While I’m not faulting Palantir or its management for generating interest income on the company’s cash pile, it’s important to recognize that a significant chunk of the company’s pre-tax income is coming from a non-innovative and unsustainable source.

PLTR Shares Outstanding data by YCharts.

5. Share-based compensation is working against investors

Another reason for investors to pass on Palantir stock is the company’s persistent share-based compensation.

Stock-based compensation often serves a purpose. Handing out vested shares, stock options, and so on, encourages talented individuals to stay with a company. Stock-based compensation can also be used as something of a dangling carrot to encourage workers and managers to meet specific growth targets.

Unfortunately, stock-based compensation can have a deleterious impact for shareholders. In the case of Palantir, steadily climbing share-based compensation is increasing its outstanding share count and having a dilutive effect on existing shareholders. While this dilutive effect has, thus far, been masked by AI euphoria and FOMO, history suggests this is highly unlikely to continue for an extended period.

6. Insiders have been persistent sellers for nearly five years

Investors would also be wise to take note of the persistent insider selling activity of Palantir Technologies’ stock since its initial public offering (IPO) in September 2020.

Once again, there’s a bit of a caveat to this data. Namely, the compensation of executives is often heavily weighted toward shares and stock options, which requires the sale of shares to cover their federal and/or state tax liability. In other words, not all insider selling is necessarily bad news or indicative of management losing faith in their company.

With the above being said, more than $7.4 billion in Palantir stock has been sold since the September 2020 IPO, with former Chief Accounting Officer Heather Planishek’s 10,000-share buy in May 2025 being the only executive or director purchase in 57 months.

If executives and directors won’t buy shares of Palantir, why should you?

PLTR PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

7. Palantir’s valuation is an unsustainable eyesore

The final piece of the puzzle that explains why Palantir stock can plunge 60% (or more) is its valuation.

Over the last three decades, megacap stocks on the leading edge of next-big-thing trends have historically topped out at price-to-sales (P/S) ratios ranging from 30 to 43. Some of the brand-name companies that fit this definition include Microsoft, Amazon, Cisco Systems, and even Nvidia, based on its peak P/S ratio of 42 last summer.

Palantir stock ended the previous week at a trailing-12-month P/S ratio of more than 107! It’s effectively three times higher than other megacap companies before their respective bubbles burst.

Even if Wall Street’s consensus sales estimates prove accurate and Palantir’s revenue catapults by 263% to $10.42 billion from 2024 to 2028, its current valuation (assuming no share-based compensation) would place it at a lofty P/S ratio of 30 by the end of 2028. This is a historically unsustainable valuation, and it’s just a matter of time before Wall Street and investors come to this realization.

“Decoupling” and “safe haven” began to be used late last week as bitcoin (BTC) held its own despite the continuing tumble in stock markets in response to President Trump’s sweeping tariffs against U.S. trading partners.

Bitcoin bulls, though, may have spoken too soon.

With stock trading closed for the weekend, fearful investors turned to the 24/7 crypto markets to place bearish bets. In late Sunday afternoon action, bitcoin was trading just above $79,000 down 5% from 24 hours earlier. As stock index futures began trading later Sunday with the Nasdaq 100 opening down 5% and S&P 500 4.5%, bitcoin fell as low as $78,400.

Other majors are faring far worse, among them ether (ETH), lower by 11% to $1,590 and solana (SOL), down 10% to $107.

The term “black monday” is trending on X — a reference to Monday October 19, 1987, when the Dow Jones Industrial Average lost nearly one quarter of its value in one session. Back then, the triggering event was the threat of a currency war by then Secretary of Treasury James Baker.

“If we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate,” tweeted hedge fund billionaire Bill Ackman, who previously had been at least modestly supportive of President Trump. “The President has an opportunity on Monday to call a time out and have the time to execute on fixing an unfair tariff system,” he continued. “Alternatively, we are heading for a self-induced, economic nuclear winter, and we should start hunkering down.”

The 10-year Treasury yield is down 14 basis points from its Friday close at 3.85%.

Updated (22:05 UTC): Added early stock and bond market trading.

Cardano’s ADA, XRP and Solana’s SOL slid on Friday after a White House official backpedaled on President Trump’s recent announcement that he would sign an executive order instructing the Presidential Working Group to move forward with the creation of strategic crypto reserve comprised of ADA, XRP, SOL, bitcoin and ether.

“I think the president just gave five examples of cryptocurrencies in his post. Those five have to be the largest by market cap,” the senior White House official said in a call with reporters ahead of Friday’s White House Crypto Summit. “I think people are reading into that a little bit too much. The bottom line is, I think that what we’ve announced here is consistent with what the president has always said about the space.”

According to data from CoinGecko, the official’s assertion isn’t strictly true. Taking out the two largest stablecoins – Tether’s USDT and Circle’s USDC – the five largest cryptocurrencies by market cap are bitcoin, ether, XRP, Binance’s BNB, and SOL. Dogecoin is the sixth-largest cryptocurrency by market cap, with ADA right behind it.

In a March 2 social media post, Trump claimed that a “U.S. crypto reserve will elevate this critical industry after years of corrupt attacks from Biden Administration.” The announcement that it would include SOL, ADA and XRP was met with criticism from many in the industry, who expressed concerns that the inclusion of altcoins in a strategic reserve could be a vehicle for corruption and self-dealing.

On March 6, Trump signed an order directing his administration to create a Bitcoin Strategic Reserve, capitalized with the U.S. government’s seized bitcoin holdings. The crypto stockpile containing other cryptocurrencies will be a separate entity.

ADA plunged over 5% to $0.82 in the minutes following his comments. XRP slid 3.5% to $2.41, while SOL was down 2%. All three tokens are firmly down over the past 24 hours alongside a weak crypto market. Meanwhile, BTC slumped to $87,000 giving up early morning gains.

Senior executives from across the crypto industry have convened in Washington, D.C. for the White House’s first crypto summit on Friday afternoon. Crypto companies including Ripple, Gemini, Robinhood Crypto, Crypto.com, Chainlink and Anchorage will be in attendance.