PEPE [PEPE] has extended its downward trend following a 10% decline in a week, currently trading at $0.00000886. Trading volumes have also remained low, dropping by 16% in the last 24 hours according to CoinMarketCap.
The recent price decrease of PEPE prompted BitMEX co-founder, Arthur Hayes, to exit his position. As previously covered by CryptoCrypto, Hayes placed a $252,680 bet on PEPE on 27th September when the price surged to a monthly peak.
Despite holding the meme coin for six days, Hayes liquidated his entire holding on exchanges, incurring a loss of $22,000 as reported by SpotOnChain.
Despite Hayes’ sale, exchange data indicates that other traders are hesitant to sell PEPE at current levels.
Based on data from on-chain analytics platform Glassnode, over 2 trillion PEPE tokens have been withdrawn from exchanges in the last 48 hours. Additionally, PEPE’s netflows have turned negative after five consecutive days of inflows.
The rise in exchange outflows alleviates short-term selling pressure on PEPE, potentially paving the way for a price rebound.
PEPE Price Prediction
An analysis of PEPE’s daily chart suggests that the recent price decline could be a correction following significant price fluctuations in late September.
Following PEPE’s rapid jump from $0.00000822 to $0.00001156 in three days, a Fair Value Gap (FVG) was created. The recent price drop appears to have filled this gap
This positions the meme coin favorably for a potential price recovery.
At present, PEPE is testing a resistance level around the FVG midline at $0.00000907. A successful break above this level could signal buyer control, setting the stage for further upward movement.
Post gap-fill, the Directional Movement Index (DMI) displayed a bullish signal as the negative DI converged with the positive DI.
This movement indicates a weakening bearish momentum and strengthening bullish pressure in the market.
Moreover, with the Relative Strength Index (RSI) hovering around 50, the market sentiment is relatively neutral. Traders should monitor for a bullish crossover of the RSI line above the signal line to confirm an uptrend.
In the scenario where PEPE fails to breach the FVG midline and drops below support at $0.00000843, it might decline further to seek liquidity around $0.00000744 before a decisive move.
Negative Shift in Funding Rates
The funding rates for PEPE have turned negative, standing at -0.0166% currently, according to Coinglass. This marks the lowest level since early August.
This data suggests that short positions are prevailing in the market as traders anticipate further price declines.
While this bearish sentiment prevails, a sudden upward price movement could trigger a short squeeze as short-sellers rush to cover their positions by buying PEPE, potentially leading to significant price hikes.