Pepe has had an impressive month, gaining 23.7%. However, those gains are now at risk as PEPE loses momentum. The asset is currently down 2.46% on the daily chart, signaling a potential continuation of the downtrend.
According to recent analysis by AMBCrypto, this decline could be prolonged as the current market sentiment tends to be bearish, with limited buying pressure to sustain PEPE’s bullish momentum.
PEPE Is Facing a Major Obstacle
PEPE is trading within a symmetrical triangle pattern at press time, a pattern often considered a precursor to a price breakout after a period of consolidation.
Recently, the token responded to resistance at $0.00001068, a level that rejected the rally twice, indicating significant selling pressure at this area.
During this time, PEPE is hovering around the support level of $0.00001025. Assuming this support level holds and enough buying pressure emerges.
In that case, the price is expected to recover, potentially retesting the resistance level and breaking the pattern, pushing PEPE towards the upper boundary of the triangle.
However, if this support level fails to hold, PEPE could retrace further to the lower support level of the ascending triangle, a highly liquid area that could generate enough buying momentum to push the price higher.
Will PEPE's Support Level Hold?
As spotted by AMBCrypto, it appears that PEPE’s current support level is unlikely to hold as technical indicators show that selling pressure from traders is increasing.
The relative strength index (RSI) is currently at 48.46, below the neutral level of 50.00, indicating that market sentiment is bearish and PEPE price may also decline.
RSI measures the speed and change of price movements in an asset.
The moving average convergence divergence (MACD) has also formed a “death cross”, with bearish momentum intensifying.
This happens when the MACD line (blue) crosses below the signal line (red), signaling that traders are more inclined to sell than hold the asset.
If this trend continues, PEPE could drop below the support level, leading to a further decline.
Interest in PEPE Continues to Decline
Open interest, used to gauge market sentiment by tracking whether participants are buying or selling, showed selling pressure was increasing at the time of the news.
According to data from Coinglass, Open Interest in PEPE has decreased by 3.61%, with a current value of $165.20 million in the near term.
The decline in Open Interest suggests that PEPE price is likely to continue falling, making a drop from current levels seem inevitable.