Pepe (PEPE), the popular frog-themed meme coin, is showing compelling signs of a potential rally, rebounding strongly after retesting a critical support level. This resurgence is underpinned by a confluence of technical indicators and a notable shift in market sentiment, suggesting renewed buying interest among investors.
Analysts are observing a bullish picture for PEPE, with recent price action indicating a robust accumulation zone. This, combined with improving sentiment in the derivatives market, points towards a possible upward trajectory for the digital asset in the coming days.
Technical Foundations for a Price Ascent
On the weekly chart, PEPE has effectively retested and found strong support around the $0,000011 mark. This level has proven resilient, with the coin trading slightly higher at $0,000012 on Monday. Should this weekly support hold firm, PEPE could extend its recovery to target the 50% Fibonacci retracement level at $0,000016 – a move that would represent a substantial increase of nearly 30% from current levels.
The Relative Strength Index (RSI) on the weekly chart, currently at 54, hovers just above its neutral threshold of 50, signaling a period of indecision that is now leaning towards bullish momentum. For a sustained rally, the RSI needs to clearly move higher. Furthermore, the Moving Average Convergence Divergence (MACD) on the weekly chart has exhibited a bullish crossover since early May, complemented by rising green histogram bars above the zero line, reinforcing the argument for growing upward momentum.
PEPE/USDT daily chart
Looking at the daily chart, PEPE experienced a temporary rejection from its daily resistance at $0,000014, leading to a 13% decline. However, the coin quickly rebounded after encountering its 50-day Exponential Moving Average (EMA) at $0,000011 on Friday. This EMA also aligns with a previously broken descending trendline, solidifying its role as a crucial support zone. Investors looking to enter the market or increase their holdings may find the $0,000011 to $0,000012 range particularly attractive for accumulation.
Should PEPE continue its recovery, the immediate target is the daily resistance at $0,000014. A successful break above this level could pave the way for further gains towards the next daily resistance at $0,000016, aligning with the weekly target. The daily RSI, currently at 56 and pointing upwards after bouncing off the neutral 50 level, further confirms the strengthening bullish sentiment.
Derivatives Data Signals Bullish Turn
A significant driver behind the optimistic outlook is the shift in the derivatives market. Data from Coinglass’s OI-Weighted Funding Rate indicates a positive change in trader sentiment. The metric, which gauges the cost of holding long versus short positions, flipped from negative to positive on Friday, reaching 0,0104% on Monday. This means that long position holders are now paying shorts, reflecting a market where more traders are betting on price increases than decreases. Historically, a similar flip in funding rates has often preceded sharp rallies in PEPE’s price, as was notably observed on July 7.
On-Chain Validation of Key Support
Complementing the technical and derivatives data, IntoTheBlock’s Global In/Out of the Money (GIOM) metric provides on-chain validation for the crucial support zone. Approximately 34.690 addresses collectively accumulated 80,19 trillion PEPE tokens within the price range of $0,000011 to $0,000012. This concentration of holdings at this specific price range establishes it as a robust support area, where a significant number of investors are likely to defend their positions, making it a key reversal area to monitor. The convergence of technical analysis and on-chain data around the $0,000011 level further enhances its credibility as a foundational support for a potential rally.
In conclusion, PEPE appears well-positioned for an upward move, buoyed by a strong technical rebound from key support, a positive shift in derivative market sentiment, and on-chain data reinforcing critical accumulation zones.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Always conduct thorough research before making investment decisions.
