Pepe Could Be Hit by Another Wave of Selling, and Here’s Why

Journalist

• PEPE’s market structure is bearish.
• Prices could fall by 18-40% if they fall below the next support level in the next few weeks.

Pepe [PEPE] From January 11th to January 24th, there was a 35% drop in the price of cryptocurrencies. The bearish market structure has been in place since January 3rd. At press time, PEPE was trading in a support zone that bulls had defended since 2023.

If the coin falls below this range, it is likely that the meme coin will lose its gains from the second half of October 2023. A metric on the blockchain suggested that token holders were preparing to sell their tokens, which could lead to a price drop.

There has been a downtrend in momentum over the last month

On January 2, the RSI for PEPE fell below neutral 50 on the one-day chart. It has remained below the neutral 50 level since then. The only exception was a brief spike beyond this on January 11th.

OBV has also fallen over the past two weeks, but has been in an uptrend for three months.

Source: PEPE/USDT at TradingView

The market structure of the one-day chart was bearish. To reverse the market structure, a move above $0.0000012 is required. PEPE recovered quickly in November when it was placed in the demand zone (cyan boxes).

It is therefore expected that buyers will be happy to return to the markets. A daily close below $0.000001 would indicate impending losses.

Weighted sentiments provided a spark, but it wasn’t enough

AskFX analyzed data from Santiment to better understand how PEPE is doing. Active addresses are trending downwards in January.

There was a significant increase in supply on the exchanges last month. They showed that PEPE was not in high demand and that another wave of selling could be imminent.

Here is the PEPE market cap in BTC.

However, the positive sentiment of social weighting in recent days was not enough to stop the negative tide.

The MVRV rate suggested that token holders may be incurring losses and the token may be undervalued. But that may not be enough for a rally.

Disclaimer: This information does not constitute financial, investment or trading advice. It is the sole opinion of the author.