Pepecoin’s value has plummeted by over 70% three weeks after hitting its all-time peak of $0.00000449. The memecoin could go down even further in the near future, based on a combination of technical and fundamental indicators.
PEPE charts flash a classic bearish reversal pattern
From a technical perspective, Pepecoin (PEPE) could experience a steep decline from its current value due to the presence of a head-and-shoulders (H&S) pattern.
Analysts who utilize technical analysis view the Head and Shoulders (H&S) pattern as a bearish reversal indicator for those who are unfamiliar with it. This pattern is formed when the price creates three peaks above a shared neckline support; the middle peak, known as the “head,” is higher than the other two, which are referred to as the “left shoulder” and “right shoulder.”
Once the price drops below the neckline, the H&S pattern is completed. As a general practice in technical analysis, traders measure the potential downside of the pattern by adding the highest distance between the head and neckline to the price at which the breakdown occurred.
On May 22, PEPE fell below its head-and-shoulders neckline, close to $0.00000156. This implies that its potential bottom could reach $0.00000041 by June, a drop of 70% from current market values.
Meanwhile, the H&S breakdown may be reaching its limit as PEPE assesses $0.00000082 for a potential recovery in June. This price, which is around 30% lower than current levels, acted as a support in the beginning of May; it also matches PEPE’s 0.786 Fibonacci line.
On the contrary, the potential for the breakdown scenario to be invalidated increases if the PEPE price resumes using the H&S neckline as a support.
Will existing PEPE holders dump?
Despite suffering recent losses, PEPE has still gained 4,000% from its exchange debut price of $0.00000044. This could result in current holders of PEPE cashing in their profits, thus intensifying the bearish trend.
Gaining advantage from Bitcoin’s price fluctuations through market evaluation and automated trading programs.
Concerns are raised when one follows the top 15 highest yielding PEPE addresses. Most of the entities have decreased their PEPE holdings in the recent weeks, with some completely liquidating their holdings to gain early profits.
Since May 5, the quantity of daily holders of PEPE has remained constant, indicating a lack of new users joining the network.
The result of this has been reduced trading activity on cryptocurrency exchanges, providing another bearish signal to current token holders.
PEPE could avoid the pessimistic outlook if the crypto market as a whole experiences an upswing, potentially driven by rallies in Bitcoin (BTC) and Ether (ETH).
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