Pepe Crypto Soars to Record High: Is a 40% Price Correction on the Horizon?
Summary:
Pepe (PEPE) crypto token's price hit a record high on May 27, following the U.S. Securities and Exchange Commission's approval of key Ether (ETH) exchange-traded fund (ETF) filings. This price surge seems to result from traders viewing Ethereum-based memecoins as high-risk, high-reward opportunities. However, the price is forecasted to undergo a 40% correction in June, similar to the trend seen in January, due to a signalling of possible price reversal. This article also highlights ongoing profit-booking activities of top-tier PEPE investors and the consequential increase in small investor holdings.
On May 27, the price of Pepe (PEPE), a crypto token, soared to its highest ever, hitting $0.00001725, a 7.60% climb. This ascent, reflecting an 88% rise from the time the U.S. Securities and Exchange Commission (SEC) greenlit Ether (ETH) exchange-traded fund (ETF) filings on May 20, suggests traders perceive memecoins based on Ethereum as high-stakes, high-yield assets. Other memecoins drafted under Ethereum, such as Dogecoin (DOGE), Shiba Inu (SHIB), and Mog Coin (MOG), also made substantial strides following sanctioning of ETF filings.
Evidence points towards a forthcoming 40% slump in PEPE prices in June as the ongoing uptick may deflate in the subsequent weeks due to increased discord between PEPE's ascending prices and the descending daily relative strength index (RSI). PEPE's impending 'bearish divergence' is a sign that the momentum for ascent isn't as strong as the price rise indicates, flagging a possible price reversal. This assumed PEPE market trend harkens back to the 40% plummet of memecoins in January, in the aftermath of stark divergence between their price hikes and the plunging RSI trends.
Moreover, PEPE's daily RSI has already overshot the 70 mark, an overbought region often leading to a price correction or stabilization phase. This further exacerbates the risk of a sell-off in an otherwise robustly performing PEPE market.
If a correction commences, PEPE's price might slide to its 50-day exponential moving average (50-day EMA; depicted in red) at approximately $0.00000965 by June, marking a 40% decrease from its present price levels. This would mirror its price drop in January. In contrast, should the rise persist, PEPE could reach its 2.618 Fibonacci retracement level near $0.00002203 in the weeks to come, translating to a roughly 32% increase from present prices.
The pessimistic outlook for PEPE is fortified by the ongoing profit-booking activities of its top-dollar investors. Strikingly, the supply of PEPE held by entities with balances more than 1 billion tokens has shrunk during the market ascension. This suggests that these 'whales' have been offloading their holdings at the temporary price tops, leading to an increase in PEPE's supply amongst smaller investors.
Certain instances have also been reported where traders have withdrawn PEPE tokens worth millions from exchanges after the recent pump, suggesting their choice to hold rather than sell. The subsequent effect of these withdrawals on whale supply data remains uncertain, but it bolsters prospects for a PEPE correction in June.
Please keep in mind that this article does not provide investment advice or recommendations. Investments and trading moves entail risk, and a careful analysis must be undertaken by readers before making any decisions.
Published At
5/27/2024 4:27:43 PM
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