The popular meme coin PEPE has started 2026 with a significant rally, with its price surging more than 20% on January 2nd. This sharp increase followed a bold prediction from well-known Hyperliquid trader James Wynn, who forecasted that PEPE could reach a market capitalization of up to $69 billion by the end of 2026.
Wynn, who reportedly earned tens of millions from early PEPE trades, compared the token's potential trajectory to that of SHIB, which saw a massive surge in a previous market cycle. In a public statement, Wynn declared, "Now, I'm calling PEPE to go from $1.7 billion to $69 billion+ in 2026 or I delete my account." At the time of the prediction, PEPE's market cap was approximately $2 billion, implying a potential 35x price increase from current levels.
Analysts have pointed to additional factors behind the rally, including tax-loss harvesting activities by U.S. investors at the end of 2025. According to analyst SΞA, investors sold assets to realize losses for tax purposes and are now buying back into bullish positions like PEPE as the new tax year begins. This activity contributed to PEPE's 24-hour trading volume surpassing $600 million, its highest level in a month.
The surge in PEPE has sparked discussions about a potential broader meme coin season. Other tokens like Milady Cult Coin (CULT) and Floki (FLOKI) also posted gains. However, data from CryptoQuant indicates that overall memecoin dominance remains at low levels, with most meme coins still down 70-90% from their previous peaks. The market's direction may hinge on whether Bitcoin shows sustained strength, as noted by investor CRG.
Technically, prior to the rally, PEPE was trading in a narrow range around a key support level of $0.0000054035, having completed what analysts identified as a corrective price cycle. The subsequent breakout on high volume suggests a shift in market structure and renewed speculative interest in the asset.
