TLDR: PEPE's Turbulent Week and Technicals
Contents
- Price Volatility and the Double Top: PEPE's price has dipped 3.19% to $0.00001399 after reaching $0.000015, forming a double top pattern
- Whale Transactions: On May 12, whale transactions spiked 257%, potentially signaling a market top
- Market Sentiment: Despite bearish signals, 72% of Binance traders maintain PEPE long positions
- Market Ranking: PEPE remains the third-largest memecoin by market cap at $5.9 billion
- Technical Outlook: A possible 25% correction to $0.00001063 suggested due to double top pattern
Whales' transactions surge by 257%, potentially indicating a double top pattern formation in the Pepe Coin (PEPE) price chart.
The PEPE coin has experienced a rollercoaster week, with its price currently trading at $0.00001399 after a sharp 3.19% drop. This follows an impressive 84% surge over three days that pushed its market capitalization to $5.9 billion. The recent price action has formed what analysts call a double top pattern near the $0.000015 resistance level.
The correction comes as on-chain data shows a staggering 257% increase in whale transactions on May 12, coinciding with PEPE's peak price. According to data from IntoTheBlock, transactions valued at over $100,000 reached 720 on that day - a worrying signal in the world of cryptocurrency.
Historically, this level of whale activity often indicates profit-taking by large holders, which can lead to price volatility and potentially a downturn. In fact, when whale transactions spiked to 720 on May 12, it signaled a possible end to the bullish cycle for PEPE, potentially leading to a correction.
The current price behavior has resulted in a sideways shift with $0.00001274 acting as a baseline support level. The consolidation has created two price peaks, which technical analysts interpret as a double top reversal pattern after a 7.42% drop.
Market Position and Broader Context
PEPE holds its position as the third-largest memecoin by market capitalization, trailing only Dogecoin (DOGE) and Shiba Inu (SHIB). This solid standing displays PEPE's resilience in the increasingly popular memecoin sector.
The token's recent success is part of a broader memecoin rally. The overall memecoin market capitalization surged from $55 billion at the beginning of May to $72.2 billion just 12 days later, representing a 45% increase.
PEPE's market cap has shown remarkable growth, surging over 120% from around $2.4 billion in March to its current level. This growth has been greatly influenced by Ethereum's rebound, which climbed nearly 60% from a low of $1,380 to above $2,500.
Given that PEPE is an ERC-20 token, its performance tends to mirror bullish momentum in the Ethereum ecosystem. Other Ethereum-based tokens have experienced similar gains during this period.
While the price is currently correcting, on-chain metrics show PEPE's holder count has grown to over 432,000, suggesting continued retail interest and support for the token. This expanding user base could provide price stability during the current correction phase.
Technical Outlook and Trader Sentiment
Technical analysis of PEPE's price chart reveals several potential warning signs. To complete the bearish double top pattern, PEPE price must drop to the $0.00001274 neckline and break the short-term support trendline at that level.
A four-hour candlestick close below this neckline would confirm the breakdown. In such a scenario, the pattern predicts a 25% crash to $0.00001063, calculated by adding the double top's height to the neckline.
The Relative Strength Index (RSI) shows bearish divergence as it declines from the overbought zone to the halfway line during PEPE's uptrend. The MACD and signal lines are falling after a negative crossover, suggesting growing bearish momentum.
However, trader sentiment remains overwhelmingly positive, despite the short-term pause in PEPE's rally. Despite the bearish technical indicators, 72% of Binance traders hold long positions, pushing the Long/Short ratio to 2.57. This extreme bullish tilt could potentially lead to a cascade of liquidations if the price continues to correct.
One trader on Hyperliquid opened a $2.3 million long position on PEPE with 3x leverage, displaying considerable confidence in future price increases. Meanwhile, crypto analyst CryptoKaleo suggested that PEPE could consolidate before potentially surging toward a market cap between $10 billion and $20 billion.
If PEPE breaks past the immediate resistance and closes a daily candle above $0.0000159, it could gain another 31%, potentially reaching the next resistance around $0.00001946 to $0.00002000.
As of the latest data, PEPE's trading volume has dropped significantly by over 20%, and open interest has declined by 11.42%. This decrease in trading activity has resulted in the liquidation of more than $4.71 million in long positions.
PEPE's price might find support at the $0.00001050 to $0.00001200 range, which could provide a favorable re-entry opportunity for bullish traders if buying pressure remains intact.
In the context of PEPE's volatile week, it's worth noting that the PEPE coin, an ERC-20 token, has experienced a 3.19% drop to $0.00001399, following a surge fueled by Ethereum's rebound. Despite the bearish signals, such as a possible 25% correction, investing in PEPE might still be an option for those looking at its longer-term potential, considering the growing holder count.
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