A bearish chart pattern suggests that PEPE could drop another 70% in value, especially if the broader market continues to trend down.
The price of Pepecoin has dropped more than 70% in three weeks after setting a record high of $0.00000449 and the memecoin could fall even more in the coming days, according to a combination of technical and fundamental indicators. .
PEPE CHARACTERS SHOW A CLASSIC DOWN REVERSE Pattern
From a technical point of view, the price of Pepecoin (PEPE) could plummet from current levels. The core of this bearish outlook lies in the classic head and shoulders (H&S) pattern.
Analysts who use technical analysis view the H&S pattern as a bearish trend reversal indicator for the case that it has not yet been reversed. It forms when the price forms three peaks on top of the common neckline support; The middle peak is called “head”, higher than the other two peaks is called “left shoulder” and “right shoulder”.
The H&S pattern settles after the price breaks below its neckline. Meanwhile, according to the rule of technical analysis, traders measure the pattern’s downside target by adding the maximum distance between the head and neckline to the breakdown point.
On May 22, PEPE broke below the H&S neckline, near $0.0000156. That puts its downside target near $0.00000041 in June, down about 70% from current prices.
Meanwhile, the H&S crash could dry up midway as PEPE tests $0.00000082 to recover in June. This level, down about 30% from the current price, served as support in early May; it also coincides with the 0.786 Fibonacci line of PEPE.
On the other hand, the breakdown scenario is at risk of being invalidated if PEPE price regains the H&S neckline as support.
WILL CURRENT PEPE HOLDERS WILL dumping?
Despite recent losses, PEPE is still trading 4,000% higher as measured from an exchange starting price of $0.00000044. As a result, more price declines could prompt existing PEPE holders to lock in their profits, thereby exacerbating the downtrend.
Concern arises if one follows PEPE’s top 15 high-yielding addresses. Almost all entities have reduced their PEPE holdings in recent weeks, some even selling their entire reserves to secure early profits.
Top 15 Pepe addresses with highest earnings and profits. Source: Wulgy/Dune Analytics.
At the same time, the daily number of PEPE holders has been decreasing since May 5, indicating that there are no single users joining the network.
Daily PEPE holders. Source: Wulgy/Dune Analytics.
That has resulted in lower trading volumes on crypto exchanges, providing another bearish sign for existing token holders.
Hourly PEPE volume. Source: Wulgy/Dune Analytics.
PEPE could avoid a bearish outlook in the event that an uptrend resumes in the broader crypto market, led by potential rallies in Bitcoin (BTC) and Ether (ETH).