Pepe Coin (PEPE) has recently formed a double top pattern near the $0.000015 mark, with a notable 7.42% dip in its value, suggesting a possible 25% drop to the $0.00001063 level. This bearish signal coincides with a sharp 257% spike in whale transactions on May 12, potentially indicating a peak in the current price cycle.
Whale Transactions Signal Possible Cycle Top
On May 12, whale transactions involving Pepe Coin surged to 720, signaling a potential cycle top, according to data from IntoTheBlock. This increase in large transactions often marks the end of bullish price rallies and may point to an impending pullback. Historically, peaks in whale transaction counts have been reliable indicators of price reversals, as seen in previous cycles throughout 2024.
Despite the bearish pattern, sentiment on Binance remains overwhelmingly optimistic, with 72% of traders holding long positions on PEPE, pushing the open interest (OI) to $583 million.
Bitcoin’s Struggles Could Weigh on Pepe Coin’s Price
As Bitcoin experiences a slight pullback, trading at $103,814, the broader crypto market could face additional pressure. Bitcoin’s inability to surpass the $104k resistance level raises the risk of a decline to the $102k support zone. A sustained drop below this threshold could trigger a market-wide correction, further weighing on meme coins like PEPE.
Technical Analysis: Double Top Pattern and Bearish Divergence
Pepe Coin’s price has experienced a dramatic rise, jumping 100% from $0.0000075 to $0.000015 between May 6 and May 12. However, the failure to breach the $0.000015 resistance has resulted in consolidation, creating a double top formation. This technical pattern suggests a potential breakdown, with the price targeting $0.00001063 if the $0.00001274 support level is breached.
The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) both show bearish signals, with the RSI declining from the overbought zone and the MACD indicating weakening momentum. A drop below the $0.00001274 support level would solidify the bearish outlook.
Can Pepe Coin Defy the Odds?
While the double top pattern signals a possible 25% drop, there is still a chance for PEPE to reverse its course. If the price manages to break through the $0.000015 resistance, the bearish pattern would be invalidated. In that case, PEPE could target $0.00001792, according to Fibonacci retracement levels.
The Risk of Blind Optimism in the Market
Despite the technical signals pointing to a potential correction, the strong bullish sentiment on Binance could exacerbate the situation. With 72% of traders holding long positions, the market remains highly optimistic, possibly setting the stage for a liquidation spike if PEPE’s price fails to maintain its upward momentum. As open interest nears $600 million, any reversal could lead to significant liquidations, further driving down the price.
Conclusion:
In conclusion, while PEPE has experienced impressive growth in recent weeks, the technical indicators, along with the spike in whale transactions, suggest that a 25% pullback could be imminent. Investors should closely monitor key support levels and market sentiment as the situation unfolds.
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