Pepe [PEPE], similar to the entire memecoin sector, experienced a significant drop as major investors (whales) shifted their investments to other areas.
The latest On Chain update highlighted the fact that a whale has sold a portion of their PEPE holdings, amounting to 130 billion tokens (almost $3 million), to enter alternative altcoin positions over the past three days.
This move has further pushed PEPE’s pullback to over 20%, calculated from its all-time high (ATH) of $0.00002957. But the question remains: How much lower can the price go before a potent rebound?
Chances of PEPE Coin Regaining Strength
At the moment, the 12-hour chart for PEPE displayed a bearish market pattern within a descending channel. The price momentum appeared feeble, with the Stochastic RSI signaling an oversold condition.
Short traders might find an advantage if the price reaches the lower channel or the 50% Fibonacci level. Nonetheless, the ultimate downward limit seems to be at the golden ratio of the 61.8% Fibonacci level ($0.000014).
Despite this, the RSI is indicating a level above 50, hinting that demand remains steady, albeit stagnant at the moment. If more investors join the ‘buy the dip’ strategy, it could potentially ignite a recovery in price.
On a positive note, breaking the trendline resistance target (white) could be within reach if Fear of Missing Out (FOMO) triggers an upward trend, especially in the scenario where BTC surpasses $100,000.
Reduced Selling Pressure on Centralized Exchanges (CEXes)
On the flip side, PEPE seems to have a window for recovery. Data from Santiment reveals that the selling pressure on centralized exchanges (CEXes) is less intense compared to the peak observed in March.
In March, the supply of PEPE on CEXes (indicated by the yellow line) peaked at approximately 230 trillion tokens. Currently, this supply has dropped to 171 trillion tokens, potentially paving the way for a PEPE recovery.
Moreover, there has been an increase in ‘buy the dip’ accumulation, reflected in the rise of tokens held outside of exchanges (depicted by the red line) during price declines.
Traditionally, these signals are viewed as positive indicators and hint at a plausible reversal in price for this meme coin with a frog theme.
Disclaimer: The views expressed do not constitute financial, investment, trading, or any other form of advice, and are solely the writer’s perspective.