Recent market activity has raised concerns about whether PEPE can maintain its footing or if further downside pressure could lead to a breakdown. The meme coin has experienced notable volatility, with analysts closely monitoring key indicators to determine its next move.

PEPE Coin Trading Volume Reacts to Price Volatility

PEPE recently saw a sharp 15% drop in value, settling at $0.000006575. This decline coincided with a surge in trading volume, which increased by 44.31% to $1.16 billion. While higher trading activity often signals strong market engagement, the accompanying price drop suggests growing caution among investors.

Pepe Coin (PEPE) was trading at around $0.000006790, down 5.01% in the last 24 hours at press time. Source: Brave New Coin

According to CoinMarketCap data, Pepe Coin’s market capitalization also fell by 15.02% to $2.76 billion. Despite this, the meme coin remains a widely held asset, with over 419,000 wallet holders and a circulating supply nearing its total cap of 420.68 trillion tokens.

Mixed Sentiment in the Derivatives Market

The derivatives market has sent mixed signals about PEPE’s short-term direction. Although derivatives trading volume increased by 13.98% to $1.62 billion, open interest fell by 11.29% to $222.14 million. This fall in open interest shows that some traders are retreating, perhaps fearing increased volatility.

PEPE needs to consolidate after a major correction, reset the RSI, and build momentum for a potential breakout later this year. Source: Schwagon on TradingView

OKX traders are presently showing a bullish inclination with their long-to-short ratio standing at 3.04. However, Binance traders appear more cautious, with short positions outweighing longs in terms of trade size. This divergence in sentiment highlights uncertainty surrounding Pepe Coin’s next move.

A glance at spot market netflows reveals an ongoing pattern of outflows, which suggests investors have sold more PEPE than they have accumulated. The trend has persisted since mid-November 2024 and has instigated increased selling pressure. There was a temporary accumulation phase early in 2024, yet no significant onrush of demand has ensued, leaving PEPE vulnerable to subsequent price declines.

Technicals Indicators Demonstrate Stabilization Signs

Momentum indicators are showing a twofold vision when it comes to PEPE’s short-term price action. The Relative Strength Index (RSI) at 37.02 indicates PEPE is exiting being oversold. A rising RSI confirms falling selling pressure, which can pave the way for a bounce in the price.

PEPE is in a falling wedge pattern with bullish reversal potential, but long-term bearish trends and a lack of volume caution against immediate breakout. Source: Bicoinmoney on TradingView

Meanwhile, the Moving Average Convergence Divergence (MACD) is still bearish. The MACD line is -0.00000022 and the signal line is -0.00000020, both in negative territory, showing ongoing downward momentum. Traders will wait for the MACD to cross into positive territory before they can think about a sustained price recovery.

Potential for a Breakout: What Analysts Are Saying

While recent bearish momentum has been observed, some analysts consider that there is space for a PEPE recovery after breaking key resistance levels. If PEPE can break its current downward wedge pattern, it could target a rally towards $0.000015—a possible gain of 55%. If the bull pressure keeps building, even some price targets go as high as $0.00002, a 175% increase.

PEPE price could encounter a massive supply within the $0.0000075-$0.0000079 resistance zone. Source: CaptainFX2 on TradingView

However, if PEPE is to sustain its uptrend, it must regain crucial resistance points at $0.0000080 and $0.00001 first. Unless it penetrates these caps, it might witness more prolonged consolidation or losses.

On the negative front, the current support price of PEPE stands at $0.000006575. A failure to maintain this support level could precipitate a drastic decline, and the next substantive support level to watch would come in at the $0.0000055 level. Falling below this point could put pressure on PEPE to move down further, testing the $0.0000048 level before any serious bounce attempt.

Looking Ahead: Can PEPE Regain Bullish Momentum?

The future of Pepe Coin remains uncertain as it straddles a critical support level. With mixed signals in the derivatives market, persistent outflows in the spot market, and a cautious investor sentiment, the coming days will be crucial for PEPE’s price action. If buyers step in and push PEPE past resistance levels, the meme coin could stage a strong recovery.

However, if selling pressure persists, a deeper correction may be on the horizon. As always, investors should closely monitor key technical levels and market trends to navigate this volatile landscape.