Pepe Coin Faces Bearish Sentiment as Whale Dumps Tokens
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NOIDA (CoinChapter.com)— Pepe coin has been experiencing a downward trend since July 1, indicating strong bearish pressure on the memecoin.
This popular meme crypto token, which spearheaded the March 2024 memecoin frenzy, appears to be suffering from profit-taking after reaching a new all-time high on May 28 this year. Now, additional bearish signals suggest that PEPE coin prices may continue to decline.
Bearish Indicators and Whale Activity Hint at Further Decline for PEPE
Current analysis of PEPE futures points to a bearish sentiment. Open Interest (OI) saw a significant rise from mid-April, peaking around late May and early June. However, since then, OI has notably declined, indicating reduced trading activity and waning interest in PEPE futures.
PEPE futures open interest. Source: Coinglass
This trend aligns with Pepe coin’s price movement, showing a strong correlation between reduced trader positions and price depreciation.
Additionally, the OI-weighted funding rate has shown significant fluctuations, with predominantly negative funding rates.
PEPE OI-weighted funding rate.
A negative funding rate, where short positions compensate long positions, reflects the prevailing bearish sentiment among traders. Recent data indicates consistently negative or near-zero funding rates, underscoring the market’s expectation of further price declines.
Furthermore, whale activity has reinforced the bearish outlook for PEPE. A major whale, ‘dimethyltryptamine.eth,’ who had previously turned a $45,000 investment into $26.7 million, recently sold 10 billion PEPE tokens worth $112,000.
A whale dumped some of its PEPE coin holdings.
The whale’s sell-off, which occurred after over 10 months of inactivity, equated to 32.73 ETH. The whale still holds nearly 2 trillion PEPE tokens valued at $21.9 million. Market participants interpret this sell-off as a sign that the whale does not foresee a strong upside for PEPE in the near future.
The whale’s decision to liquidate a portion of their holdings during a downtrend emphasizes potential concerns over PEPE’s short-term performance. Retail traders often mimic whale movements, so this token dump could increase bearish pressure on the memecoin.
As a result, it seems traders are retreating, and market sentiment is clearly negative, with expectations of continued downward price movement.
PEPE Price Testing Crucial Support
The descending channel support, combined with the 0.382 Fibonacci retracement level and the 200-day EMA (green wave) trendline, could be a key support level near $0.000008 for PEPE Coin prices.
A bullish rebound from this level could see PEPE test the 100-day EMA (blue wave) resistance near $0.0000101 and potentially rally to $0.00001216.
PEPEUSD daily price chart with RSI. Source: Tradingview.com
PEPE has been trading within a descending channel since late May, with prices consistently failing to break above the upper trendline resistance.
Conversely, a breakout below the descending channel could intensify bearish pressure on the memecoin. Such a breakdown would likely attract more bears to the market, potentially pushing PEPE coin prices to the next support level around $0.0000067.
The Relative Strength Index (RSI) remains neutral, with a score of 31.22 on the daily charts. This RSI score suggests that the market could move in either direction, depending on prevailing sentiment and trading volume. However, the overall bearish indicators recommend a cautious approach for investors.
