In late December, the wider cryptocurrency market has seen a resurgence of bearish sentiment, compounded by the U.S. Federal Reserve’s recent decision to lower rates by 25 basis points.
Meme coins, which have shown strongly speculative trading principles, have been hit particularly hard, with Pepe Coin (PEPE) posting indications of a potential dip below the $0.00001 mark.
MEME coin market capitalizations currently total $105 billion, with a $28 billion 24-hour trading volume, according to Coingecko. These numbers highlight traders’ high-stakes environment for meme coins as volatility mounts.
Whale Sell-Off Raises Concerns of More Downside
Recent transfers of 150 billion PEPE tokens valued at $2.72 million from a prominent whale to Binance have exacerbated market volatility. The transaction comes after the same whale withdrew 150 billion PEPE ($2.94 million) and 60 billion Shiba Inu (SHIB) ($1.52 million) from the same platform on November 28.
According to blockchain analytics from Lookonchain, the whale is struggling with $219,000 in unrealized losses on PEPE and $136,000 in unrealized losses on SHIB. Should this pressure continue to pull the price down, further liquidation appears likely.
In the past, for whales to move so much, it was always when selling pressure had increased, and the market entered a prolonged correction, which caused smaller comers to shun the stock.
Potential Breakdown Signal
To add to the nervousness, some technical indicators had shownthat PEPE was on the brink of a sharp decline. On the daily chart, we can see a double-top formation, a classic bearish reversal pattern. The twin peaks formed at approximately the same level, and then a breakdown below support creates a bearish setup.
And price action of recent days attests to this: PEPE has fallen 22% in 48 hours, from $0.000022 to $0.0000174. RSI also shows a divergence as the price makes higher highs while the RSI makes lower highs. This divergence usually indicates a loss of bullish momentum, further feeding the fears of losses.
Key Levels to Watch
Should the existing bearish structure unfold, PEPE’s price may penetrate the crucial neckline support at $0.0000172. If it were to break at this level, we could see a severe selloff, potentially bringing the price down by 55% to around $0.0000077.
But all is not yet lost for PEPE holders. If the buyers manage to defend the $0.000017 support level, the price of coin may stabilize and prepare for sideways consolidation. Having a scenario like that could be the last opportunity to recapture bullish strength and allow a rally to begin again down the line.
Broader Implications for Meme Coins
The hurdles in front of PEPE highlight the highly speculative nature of meme coins, as well as how vulnerable they are to major whale activities. Although the communities backing these coins do keep feedback alive, extended price recoveries are generally driven by wider market sentiment and external activities.
The recent events also brought into focus the risks of speculative assets. Despite this clear upward move, traders remain careful, monitoring whale purchases as well as technical barriers that determine this period of uncertainty.
Final Thoughts
The future of Pepe Coin remains uncertain as market forces and whale activities sieve in. While a precipitous drop below $0.00001 seems imminent, protection from freefall is provided, for now, by strong buying interest at key levels. For now, PEPE has the limelight as investors consider their next play in a high-stakes, uncertain market.
Cryptocurrency investments are subject to high market risks. Investors should do their own research and consult with a financial adviser before making investment decisions.
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FAQs
What is leading to the potential price surge of Pepe Coin?
Some bearish market momentum, profit-taking from whales, and a double-top chart pattern, all combined, could lead to Pepe Coin dipping below that crucial $0.00001 support level.
What does the price of Pepe Coin mean at $0.000017?
A key support zone lies at the $0.000017 mark. A breakout could lead to a retest of the price decline or another bounce while holding it, which could maintain support for Pepe Coin and open the door for recovery.
Whale Sell-Off of Pepe Coin: How It Impacts the Cryptocurrency?
Whale scraping creates downward pressures on the market and further exacerbates investor fears, leading to longer corrections for speculative assets like Pepe Coin.
A double-top pattern signifies that Pepe Coin’s chart is giving out a bearish signal.
A double-top indicates a bearish reversal, where the price hits resistance at similar highs, indicating a loss of buying momentum and possibly falling even lower than important support levels.
