Over the last couple of weeks, there has been a notable surge in the cryptocurrency markets. Amidst this surge, meme coins have been leading the way with substantial gains.
One such meme coin making waves is Pepe [PEPE], which has shown a consistent upward trend over the past fortnight.
At the time of writing, PEPE was being traded at $0.0000114. This represented a 44.8% increase on a monthly basis, with an additional 39.07% surge in the past week alone.
Despite these gains, the meme coin still lingers below its recent high of $0.0001314, standing approximately 32% below its all-time high (ATH) of $0.000017.
This situation raises inquiries about the sustainability of PEPE’s recent upward trend and the potential for a market correction.
Pepe’s RSI Showing Overbought Conditions
As per CryptoCrypto’s analysis, PEPE has been witnessing a robust upward momentum with bulls dictating the market.
However, its Relative Strength Index (RSI) has climbed into the overbought territory at 76.5, a common sign of a possible reversal in the prevailing trend.
An overbought state typically indicates a potential slowdown in the upward momentum, hinting at a price reversal or a consolidation phase in the near future.
Notwithstanding the overbought conditions signaling a potential pullback, it does not confirm an imminent reversal.
Consequently, even with the RSI in the overbought region, our evaluation indicates that PEPE is firmly entrenched in an upward trend, making a short-term reversal less probable.
What Do PEPE’s Charts Portend?
While the RSI suggests a likelihood of a reversal, it is crucial to consider other fundamental indicators.
Initially, Pepe’s Adjusted Price DAA Divergence has continued to show positivity over the past week.
This indicates a rise in active Pepe addresses, signifying increased user engagement and interest, despite the price not fully reflecting this. Hence, PEPE is witnessing growth in adoption and could potentially see further price upticks.
Furthermore, Pepe’s Funding Rate Aggregated by Exchange has stayed positive for the last seven days, indicating that long position holders are outpaying those holding short positions.
The fact that investors are willing to pay a premium to maintain their positions underscores their confidence in Pepe’s future value.
Lastly, the higher liquidations experienced by short position holders compared to longs reflect a positive market sentiment. Shorts have faced significant liquidation pressures over the past four days.
Therefore, according to our analysis, despite Pepe’s RSI hitting overbought levels, the meme coin’s uptrend remains robust, suggesting it will endure before a potential price decline ensues.
If the current conditions persist, Pepe is likely to target the next significant resistance level at $0.0000119. Conversely, a correction could drive the memecoin down to $0.000009847.