PEPE has captured significant attention lately as its price experienced an impressive 84% rally, making it a standout among meme coins. However, beneath the surface of this uptick lies a series of signals that suggest this explosive growth may be short-lived. If you’re keeping a close eye on the cryptocurrency landscape, it’s essential to consider these key points that might drive a reversal in PEPE’s price.
1. Technical Patterns Indicate Fragility
On the 12-hour chart, PEPE is forming what appears to be a classic bull flag structure. This pattern typically signifies a strong continuation signal, where prices consolidate after a rally before another potential surge. Adding to this optimism, the 50-period exponential moving average (EMA) is nearing the 100-period EMA, indicating a possible trend shift.
However, this bullish structure depends on PEPE holding above the key $0.0000060 support level. If the price dips below this threshold, the bullish technical structure could quickly weaken, signaling increased downside risk. Traders heavily relying on optimistic charts should keep this in mind before committing further investments.
2. Whale Activity Suggests Distribution
Despite the recent price surge, data shows an alarming trend among PEPE whales. Large holders have reduced their stakes significantly. For instance, the total PEPE supply controlled by major players dropped from 136.71 trillion tokens to 133.85 trillion tokens in just a few days — equating to approximately $20 million in market value.
Strong, sustainable crypto rallies are typically backed by whale accumulation. However, the ongoing selling by major holders suggests profit-taking activity rather than long-term confidence. Compounding this concern is the increased on-chain movement of tokens. Spent coin metrics reveal a sharp spike in PEPE token circulation, often linked to distribution phases where investors exit their positions.
3. Crowded Long Positions Raise Liquidation Risks
Beyond on-chain activity, derivatives market data highlight another major concern. PEPE’s perpetual futures show crowded long positions, creating a precarious imbalance. At present, the cumulative long liquidation leverage sits at $218 million, nearly double the short exposure.
This stark imbalance suggests that shorts were forced out during the rally, pushing prices higher artificially. However, this phenomenon leaves PEPE vulnerable to sharp declines. An unexpected dip in price could trigger cascading long liquidations, amplifying losses and potentially erasing recent gains rapidly. Notably, critical key levels include $0.0000060 — falling below this could open doors to the next support level around $0.0000046, a potential 30% decline.
How to Stay Informed and Protected
PEPE’s price rally brings significant interest and speculation, but investors must remain cautious. While short-term gains are alluring, the underlying signals point toward volatility and risks. For crypto enthusiasts looking to stay ahead, leveraging tools like the BeInCrypto’s Daily Crypto Newsletter can provide up-to-date insights and crucial market trends.
Optional Recommendation
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In conclusion, while PEPE’s rally may inspire excitement, the mixed technical, on-chain, and market data indicate fragility lurking behind the scenes. Investors would be wise to tread carefully and monitor key support levels, making informed decisions based on unveiled risks.
