PEPE [PEPE] has sustained its downward trend following a 10% decrease over the past seven days, 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 decline of PEPE led to BitMEX co-founder Arthur Hayes closing his position. As previously highlighted by CryptoCrypto, Hayes had invested $252,680 in PEPE on September 27th when the price experienced a monthly spike.
However, after holding the meme coin for six days, Hayes transferred his entire PEPE holdings to exchanges, resulting in a loss of $22,000 as reported by SpotOnChain.
Despite Hayes’ sell-off, exchange data indicates that other traders are hesitant to sell PEPE at its current valuation.
On-chain analytics from Glassnode revealed that over 2 trillion PEPE tokens were withdrawn from exchanges in the past two days, leading to negative netflows after five consecutive days of inflows.
The rise in exchange outflows has alleviated short-term selling pressure on PEPE, potentially paving the way for a price recovery.
PEPE Price Projection
An examination of PEPE’s one-day chart suggests that the recent price decline may signify a market adjustment following notable price fluctuations in late September.
Following a rapid surge from $0.00000822 to $0.00001156 in three days, PEPE created a Fair Value Gap (FVG), which has now been filled by the recent price correction.
This development positions the meme coin favorably for a potential price rebound.
PEPE is currently testing a resistance level at the FVG midline of $0.00000907. A successful breach above this midline could confirm buyer dominance and set the stage for further upward movement.
Following the FVG fill, the Directional Movement Index (DMI) showed a bullish turn as the negative DI converged with the positive DI, indicating waning bearish momentum and rising bullish strength.
Moreover, with the Relative Strength Index (RSI) hovering around 50, the market appears relatively neutral. Traders are advised to monitor a bullish RSI crossover above the signal line to confirm an upward trend.
If PEPE fails to surpass the FVG midline and dips below the support level at $0.00000843, it may retreat further to seek liquidity at $0.00000744 before a potential decisive move.
Negative Funding Rates Emergence
PEPE funding rates have turned negative, currently standing at -0.0166% as per Coinglass. This marks the lowest level reached since early August.
This data suggests a market bias towards short positions, reflecting traders’ anticipation of further price declines.
While this bearish sentiment prevails, a sudden price surge could trigger a short squeeze, compelling short-sellers to buy PEPE to cover their positions, subsequently fueling additional price hikes.