This month, Bitcoin [BTC] has twice attempted to break above the $65,000 resistance level, and both times it has suffered a sharp pullback.
The latest drop that sent BTC price to $58,000 – its lowest in more than two weeks – has sparked concerns of a deeper correction.
At press time, Bitcoin price was at $62,662, AMBCrypto warned that if the same pattern continues, Bitcoin could face further bearish pressure.
There is a positive side, however. A sharper pullback may have cleared out the weak hands, potentially sparking fresh interest from stronger buyers.
This cleansing effect often leads to fresh accumulation, setting the stage for a recovery. While Bitcoin has struggled, memecoins like PEPE have seen a resurgence. PEPE has gained more than 5% in a week.
Typically, memecoins thrive during times of market volatility as traders look for high-risk, high-reward opportunities. But PEPE’s performance could still depend on Bitcoin’s price action.
BTC Is Showing Short Term Potential
Currently, it appears that BTC is headed for a short-term correction, with long positions regaining control of the market.
This scenario creates ideal shorting conditions, where short sellers are forced to buy back BTC, pushing the value of each token higher.
However, this does not guarantee a strong enough recovery to send BTC into a bull run to $70,000.
Over the past week, long-term BTC holders have moved less than average, while sellers holding BTC for less than 155 days have begun to sell off their holdings, as indicated by the green wig.
In a bull market, increased selling often signals a potential market top. As more investors take profits, concerns are growing that a deeper pullback could push BTC below $60,000.
Conversely, if $62,000 proves to be the bottom of the market – with buy orders dominating, LTH remaining stable, and others seeing this as a dip to buy – then this could signal the start of an accumulation phase.
It is important to keep a close eye on these actions; any small deviations in these trends could limit the recovery that currently appears possible.
PEPE Can Stay Green
Historically, memecoin has seen strong price increases during Bitcoin price corrections as traders look for high volatility opportunities in an unstable market.
However, they are also very sensitive to the general trend of the Bitcoin market.
If BTC can hold its current levels and begin to rally, PEPE could experience a short-term correction as traders shift their focus back to BTC and other high-cap assets.
On the other hand, if Bitcoin continues to weaken, PEPE could benefit from another memecoin cycle, potentially pushing the price to new highs.
While many newly launched memecoins have recorded double-digit growth, PEPE is likely to continue its growth momentum.
Over the past three days, PEPE spiked above $0.000010 but has struggled to hold that level.
The massive inflow of 1.8 trillion PEPE tokens into exchanges - a three-month high - has made it difficult for bulls to sustain the rally.
This highlights how volatile memecoin is. Interestingly, as BTC falls, PEPE sees an increase in net withdrawals, which historically is a sign of a market bottom.
For a successful bull run, consistent net outflows are crucial. If this trend is broken as BTC regains dominance, it could dampen the renewed optimism surrounding PEPE.
Overall, the market seems to be in favor of memecoin right now. The next few days will be crucial in determining whether BTC can regain strength or PEPE continues to steal the spotlight. If so, PEPE could soon break above the $0.000010 resistance level.
