Pepe (PEPE), a popular memecoin in the crypto market, has experienced a significant price decline, falling by 65% from its all-time high. Fueled by the broader crypto market crash, PEPE’s price drop has raised concerns among crypto investors, especially as key technical indicators suggest that more losses may be on the horizon.
Key support levels and investor exodus
Pepe recently dropped below a critical support level of $0.000011, bringing its price close to the lowest seen since 7 November 2024. Data from leading blockchain analytics platform Nansen indicates that the number of “smart money” investors holding Pepe has fallen to 68, down from a previous high of 91. For context, “smart investors” refers to individuals or institutions seen as informed or experienced crypto market participants.
Per Nansen data, these investors have reduced their holdings significantly. Notably, from February 2024, their combined Pepe tokens have shrunk from 12.32 trillion to 9.52 trillion. This notable reduction in both the number of investors and the tokens held suggests that those with deeper market insights are losing confidence in PEPE’s potential for recovery in the short term.
Read also: Memecoins poised for continued growth in 2025—Messari
Shifting focus to other memecoins
The performance of PEPE has not been isolated given that several other Ethereum-based meme tokens such as Shiba Inu (SHIB), Floki (FLOKI), and Dogelon Mars have also seen significant declines in the past weeks.
This broader trend is partly driven by a shift in investor attention towards memecoins on alternative blockchain networks like Solana. Tokens such as Fartcoin, Official Trump (TRUMP), and Dogwifhat (WIF) have become more attractive to investors, pulling capital away from Ethereum-based projects. This reallocation of funds is said to has exacerbated Pepe’s downward momentum.
Technical signals point to further declines for PEPE
Moreover, the futures market reflects the waning demand for PEPE. Particularly, open interest in Pepe futures dropped to $282 million on Tuesday from a year-to-date high of $556 million. This decline in open interest is a clear indicator that traders are stepping back, reducing their bets on the memecoin’s future price movements.
Technical analysis also paints a bleak picture for PEPE. It bears mentioning that the memecoin’s price appears to be on the verge of forming a “death cross” pattern. For the uninitiated, this chart pattern is a bearish signal that occurs when a short-term moving average (in this case, the 50-day weighted moving average) crosses below a long-term moving average (the 200-day weighted moving average). Such a crossover often signals that a crypto asset is not attracting sufficient buying interest and could see further declines.
Additionally, Pepe has moved below the lower boundary of a descending channel as seen in its one-way price chart, a pattern that usually suggests continued downward pressure.
Further, the Average Directional Index (ADX) has risen to 27, indicating that the prevailing downtrend is strong. Meanwhile, the Relative Strength Index (RSI) is nearing oversold levels, hinting at a potential short-term recovery. However, the overall technical picture for PEPE remains bearish.
If the downward momentum persists, the next key support level to watch is $0.0000059, which was last observed in August 2024. A move to this level would represent an additional 45% decline from the current price, deepening the losses for investors.
Despite these concerning signals, there is one technical pattern that offers a potential silver lining. Pepe is forming a falling wedge pattern. Historically, falling wedges have been seen as reversal patterns that can precede a rebound. However, the reliability of this pattern will depend on whether the price action remains confined within the two descending trend lines that form the wedge.
While the falling wedge suggests a possibility for future recovery, the current environment is fraught with risks. The combination of a declining number of smart money investors, dwindling futures interest, and bearish technical signals all point to continued pressure on PEPE’s price. As always, those considering investing in highly volatile assets should do so with caution and remain prepared for continued market turbulence.
Trading at $0.00001023 at the time of writing, PEPE is down over 20% in the past 7 days.
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Ndianabasi Tom A Petroleum Engineering degree holder, Ndianabasi’s interest since 2018 has been studying the ever-growing field of blockchain and cryptocurrency, keenly evaluating the innovation, exploration, and expansion of this field locally and globally. The founder of Nitadel a media platform, Ndianabasi has been a Writer at Crypto Asset Buyer (CAB) since 2021. When he is not drilling resources in the blockchain and cryptocurrency field, Ndianabasi is singing, reading, watching crime movies, or playing football.
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