The downward trajectory of Pepe [PEPE] resumed following a bullish breakout in the market structure on August 23. Following Bitcoin’s [BTC] dip below the $56,000 support level, Pepe’s daily structure turned bearish once again.
An analysis of correlation patterns reveals the close relationship between Pepe’s price movements and those of Bitcoin, as well as other major meme coins, notably Shiba Inu [SHIB].
This suggests that the meme sector has struggled to diverge from Bitcoin’s bearish trend over the past month.
Dim Prospects for Bullish Sentiment due to Decline in Network Activity
Recent data on daily active addresses revealed a notable decrease of 30.88% in new addresses and 12.47% in active addresses over the past week, indicating a decline in network activity and adoption.
This decline is not a recent development. In May, Pepe saw a peak in active addresses at 9.85k, but since then, there has been a consistent drop, with the current figure standing at 2.22k.
Moreover, the dwindling number of zero balance addresses, typically signaling network health and increased engagement, does not provide much optimism given the overall downward trend in other network metrics.
Within the trader community, short-term holders of PEPE have decreased by 25.03% over the last month, although there has been a modest rise in overall holder numbers, offering a slight silver lining.
Projected Liquidity Targets for PEPE
An examination of the liquidation heatmap indicates that the $0.00000588-$0.00000619 range is a key liquidity target for September.
A potential return to this liquidity pool could potentially trigger a reversal in trends, presenting an attractive buying opportunity for investors.
However, should Bitcoin sustain losses and market sentiment fail to shift in the coming weeks, these liquidity clusters may not suffice to impede the bearish trend in Pepe’s value.