As a seasoned crypto investor with several years of experience, I’ve seen my fair share of market volatility and bull runs. However, the recent correction trend in the cryptocurrency market has been particularly challenging. The memecoin sector, including PEPE, has faced accelerated selling pressure due to the broader market downturn.
In the second week of June, the cryptocurrency market underwent significant supply pressure. This was caused by Bitcoin‘s price drop from $71,000, heightened macroeconomic uncertainty, and BTC miners capitulating. Consequently, most major altcoins started a new correction trend. However, due to its inherently volatile nature and speculative trading, the memecoin sector faced intensified selling pressure during this market downturn.
Bull Flag Formation Points Major Recoversal
As a researcher studying the cryptocurrency market, I observed that PEPE, the meme coin with a Frog theme, demonstrated impressive growth during the April-May market recovery. Reaching a remarkable peak of $0.00001725, PEPE’s bullish trend gained momentum. However, the asset’s trajectory took a turn when Bitcoin retreated from its $71,000 position, initiating a correction phase for PEPE.
The shift to a bearish outlook caused Pepe coin to drop by 30%, trading at a price of $0.000012. Its market capitalization hovered near the $5.07 billion mark during this time.
This past week saw significant downturn for crypto investors as Bitcoin dropped to a 4-week low of $65,000. Several factors may have contributed to this trend, including:
Based on the current market mood, there is no indication of a turnaround, implying that a correction may continue in the coming days.
A recent Onchain report showcased the rollercoaster experience of a PEPE token trader. At the outset, this trader purchased a substantial amount, which totaled 114.7 billion PEPE for a cost of $1.27 million. Subsequently, they identified significant potential gains as PEPE reached an astounding peak price of $0.0000017 on May 27, resulting in profits worth approximately $670,000.
As a financial analyst, I can rephrase that statement as follows: I observed a PEPE trader making the decision to liquidate their entire position of 114.7 billion PEPE tokens for an equivalent value of 366.5 ETH, or approximately $1.27 million, marking their breakeven point in the trade.
He bought 114.7B $PEPE($1.27M) at $0.000011 on May 14 and May 15.
I analyzed the price trend of $PEPE and noted that it surpassed the level of $0.000017 on May 27. At that point, my profit stood at approximately $670K, representing a 50% increase. However, I did not… (continue with your intended action or explanation).
— Lookonchain (@lookonchain) June 15, 2024
Despite not being able to sell at the current elevated price, the trader observed in dismay as the value dropped below what he had paid, eventually having to sell all his assets just to cover his costs and avoid losses. This meant forfeiting potential significant profits.
This observation underscores the unstable character of this financial asset, as major investors anticipate a modest price shift in the imminent future.
An examination of the PEPE day chart reveals the presence of two parallel trendlines, which frame the price action and form a potential bull flag pattern. This chart configuration often emerges during a prolonged uptrend as a sign that buying pressure is returning and the bullish trend may continue.
To indicate a possible revival for PEPE buyers, the price needs to surpass the previous resistance line, acting as a potential support level. If this breakout remains strong, PEPE’s price may attempt to retake its high of $0.0000175 and potentially reach a goal of $0.00002.
Technical Indicator
- Pivot Levels: With the Pepe coin preparing to enter price discovery mode, the traditional pivot level indicator highlights potential resistance at $0.00002, followed by $0.000024.
- Average Directional Index: The daily ADX slope falling below 25% indicates the buyers are recuperating the strength for the next recovery leap.
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2024-06-15 15:36