PEPE, a popular memecoin, recently experienced a surge in price after a period of decline. Despite this positive movement, there seems to be a lack of substantial bullish momentum. What factors are keeping market bulls at bay at this moment?
An analysis of PEPE’s price action reveals an interesting development. While the price continued to drop from mid-August to the first week of September, the Relative Strength Index (RSI) showed a different pattern by indicating higher lows. This divergence typically signals a bullish trend for any asset.
Consequently, traders may anticipate a swing low in PEPE’s price, followed by a notable rally. Particularly noteworthy is the recent price dip towards a 4-month low, a level that previously attracted strong buying interest.
Is there a Decrease in Demand for PEPE?
Although there was some accumulation observed, reflected in a minor uptick, the overall demand for PEPE appears to be subdued. The Money Flow indicator, having bounced back from the oversold region at the beginning of the week, supports this observation.
Concerningly, whales, who are significant holders of PEPE, have shown a lack of active engagement, as indicated by data from IntoTheBlock. The data reveals a decrease in the amount of PEPE held by whales from 203.27 trillion to 200.24 trillion since the start of September.
Additionally, a slight decline in retail holdings, from 112.52 trillion to 112.08 trillion, was noted in historical concentration data. The only uptick was observed in investor holdings, which rose from 102.22 trillion to 105.75 trillion during the same period.
While there is still some level of interest in PEPE, the diminishing involvement of whales and retail investors suggests that the memecoin is facing challenges in gaining bullish momentum in the short run.
Looking at the long-term perspective, data on PEPE addresses by the duration held indicates that holders are approaching a historical peak at 83,710 addresses. The number of short-term swing traders has also reached a high point, around 192,790 addresses.
Meanwhile, trader activity has substantially declined since June, dropping to levels last seen before PEPE’s rally in February. This trend signifies that PEPE is shedding weak-handed traders, possibly paving the way for a resurgence in trading activity if the coin experiences heightened volatility. However, for now, weak demand is likely to govern the fate of the memecoin.