Whales Move In as PEPE Eyes Breakout—Is This the Next Big Pump?

PEPE has been trading within a narrow price range for the past week, hovering around $0.000007112. Despite a relatively subdued performance, technical analysis suggests that PEPE could be on the brink of a major price movement. As the coin consolidates close to its 21- and 50-day moving averages, all signs point toward a potential breakout that could lead to significant price action in the coming weeks.

PEPE Consolidates in Key Range

For the last several weeks, PEPE has been consolidating within the $0.000005 to $0.000009 range, exhibiting relatively low volatility. The current price is testing this key range, suggesting that coin is preparing for a breakout. The meme coin has also been consistently trading near its 21 and 50-day moving averages, which often signals that the market is building momentum.

Analyst Steph is Crypto reveals that PEPE is nearing a crucial technical level. The price is currently probing for a breakout above a downtrend that has been in place since December 2024 highs.

If coin breaks this downtrend, it could potentially experience a sharp rally, possibly driving the coin to its 200-day moving average (DMA) at $0.000013, representing a potential upside of 100%. However, such a rally will depend on whether the broader market conditions align favorably.

Technical Setup and Chart Patterns

The price chart of PEPE clearly shows patterns that reflect a pennant, where market pressure leads to a breakout. Pennants are triangular patterns formed when the price bounces between two converging lines in a continuation pattern before it tends to move strongly in either direction. In the event this formation pattern breaks out, it will most likely be directed in either a bullish or bearish trend. Most traders are waiting for this pattern to complete with a directional move up or down.

Bearish Pressure and Resistance

The current situation with the price has had a rather bearish outcome after the coin could not break through the 50-day EMA. The 50-day moving average has proven to be a bearish resistance for the token since mid-March, and the token’s latest attempt at rebounding to a seven-day high of $0.0000077 was firmly closed out. Thus, the coin has pulled back to test an important shelf around the broken downward sloping trendline of a falling wedge formation.

If this level continues to be tested, there could be a chance for the traders to enter the market with a buy signal expecting a bullish turn. However, if the price is resisted at the 50-day EMA, a reversal can cripple coin further as it will be less likely to advance upward.

MACD and Momentum Indicators

Momentum indicators such as the MACD (Moving Average Convergence Divergence) are showing signs of waning bullish momentum. The MACD and its signal line are nearing a potential negative crossover, a technical signal that could indicate further downside pressure. If confirmed, this could suggest that token’s bullish trend is losing steam, and the coin could face a period of extended bearish movement.

Whale Activity and Market Liquidity

In the past 24 hours, five new wallets have acquired 611 billion tokens, worth approximately $4.28 million at current prices. These wallets were funded using ETH withdrawn from Tornado Cash, a decentralized mixer, raising questions about the legitimacy of these transactions. The potential involvement of hackers in acquiring large amounts of cryptocurrency raises concerns about the coin’s future price action.

Moreover, the overall market sentiment has been volatile, with PEPE seeing a -5.37% drop in open interest, now standing at $281.25 million. Despite this, the funding rate for coin has turned positive, indicating increased long positions. The increase in long positions suggests growing optimism for token, although this bullish sentiment could be short-lived if the coin fails to break above key resistance levels.

Liquidation Risks and Price Volatility

As the price fluctuates, token is approaching a critical level at $0.00000689. If the price falls to this level, a significant amount of long positions, totaling $2.63 million, could be liquidated. This would likely increase market volatility and could lead to a further decline in price. In the short term, PEPE could retest its broken resistance trendline near $0.0000062, and if it fails to recover, the coin may drop as low as $0.0000050.

Conclusion: 

The outlook for PEPE remains uncertain, with both bullish and bearish scenarios on the table. On the one hand, technical indicators point to a potential breakout, with a significant price rally possible if the coin can break above its downtrend. On the other hand, market volatility and the broader economic environment could limit PEPE’s upside potential. Investors and traders should watch for key support and resistance levels to determine the next major move for token.

Frequently Asked Questions (FAQ)

1. What is the current price range of PEPE?

PEPE has been consolidating within the $0.000005 to $0.000009 range, showing low volatility.

2. Could PEPE experience a breakout soon?

Yes, if PEPE breaks its downtrend from December 2024, it could rally to $0.000013, a 100% potential gain.

3. What are the risks for PEPE investors?

If PEPE fails to break resistance at the 50-day EMA, it could face bearish pressure and a further decline.

4. What impact does whale activity have on PEPE’s price?

Recent whale activity, especially from wallets funded via Tornado Cash, raises concerns about PEPE’s legitimacy and future price movements.

Appendix: Glossary of Key Terms

PEPE – A meme coin that has gained popularity within the cryptocurrency market, typically used for speculative trading.

Consolidation – A phase where the price of an asset moves within a narrow range, indicating indecision or a period of low volatility before a potential breakout.

Breakout –  A price movement that breaks through established support or resistance levels, often leading to a significant directional move.

DMA (Daily Moving Average) –  A statistical calculation that smooths out price data to identify trends over a specific period, such as the 21-day or 50-day moving average.

Falling Wedge Pattern –  A technical chart pattern characterized by converging trendlines, often suggesting a reversal or breakout in the market once the pattern is complete.

MACD (Moving Average Convergence Divergence) –  A momentum indicator used in technical analysis to identify changes in the strength, direction, and momentum of an asset’s price.

Whale Activity –  Large transactions or movements in the market, typically executed by a single entity (or group), which can significantly influence the price of an asset.

Sources

CryptoNews – cryptonews.com

FX Street – fxstreet.com