- PEPE recovered 37% this week; can it extend the uptrend?
- The current PEPE market wasn’t overheated, but was still negative, per Funding Rates.
Bitcoin’s [BTC] rebound from $76K lows to nearly $85K spurred slight speculative activity, with key memecoin indices tracked by The Block surging 4% on average on daily charts.
In particular, the frog-themed memecoin, Pepe [PEPE], bounced back 37% from its recent lows of $0.00000525. With overall market uncertainty, is the recovery sustainable?
PEPE’s recovery hurdles
Source: PEPE/USDT, TradingView
The memecoin lost about 80% of its value since peaking at $0.000028 last December. This has effectively erased all the 260% gains seen during the ‘Trump pump’ as it fell below November levels.
But the dump appears to have eased above $0.0000050 (white zone). In early 2024, PEPE bottomed at the same level but fluctuated below $0.0000080 before doubling to $0.000016 by May.
If history rhymes, the recovery could extend. However, there were overhead hurdles at $0.0000080 (breaker block) and the trendline resistance (white).
Additionally, the rebound seen in RSI and OBV indicators suggested that the recovery could push forward.
However, another risk-off move could embolden bears to dump PEPE to 2024 lows of $0.0000020.
PEPE isn’t overheated
Source: Coinglass
Another data set that supported the recovery extension was the negative funding rate, meaning there was no overleverage in the market at press time. This could reduce liquidation risk and allow PEPE to climb higher.
That said, there were considerable liquidity pockets below the current price action, especially at $0.0000065 and $0.0000068.
On the other hand, above the PEPE price action, there was only one liquidity pocket at $0.0000073-$0.0000074.
Simply put, a liquidity-driven price action could slightly dip $0.0000065; however, a short squeeze above $0.0000074 could set the memecoin to hit the immediate hurdle of $0.0000080.
Source: Coinglass
Put differently, PEPE could still manage another 10% gain before potential price rejection at $0.0000080. However, a renewed weakening in the broader crypto market could invalidate the bullish outlook above.
