After an impressive 97% surge from its August lows, the price of Pepe ($PEPE ) may be signaling a potential reversal. In August, PEPE dropped to around $0.000006, but by Sunday, it had nearly doubled, approaching $0.000012. This rally helped the coin break above its 50 and 200-day moving averages ($DMAs) for the first time since May, breaking free from a short-term downtrend that had persisted since July.

The sharp rise in $PEPE 's value mirrors a broader crypto market rally in September, driven by optimism around potential monetary policy easing by central banks globally. Meme coins like PEPE are seeing renewed momentum, leading some to speculate that “meme season” could be making a comeback. Last week alone, from Thursday to Saturday, PEPE surged more than 30%.

PEPE Price Outlook: A Pullback Coming?

Following its weekend highs, $PEPE ’s price has dipped below $0.000011, raising concerns about a possible downward correction. The recent surge pushed PEPE into overbought territory, with the 14-day Relative Strength Index (RSI) reaching a peak of 77 on Saturday, signaling potential exhaustion in the rally. Although it has since dropped below 70, similar RSI spikes in recent months have preceded pullbacks in PEPE's price.

On top of that, PEPE’s futures funding rates have remained consistently elevated around 0.010% since mid-September, according to CoinGlass. Historically, sharp increases in funding rates have been linked to local price corrections, while sustained upward trends in funding often align with price peaks. Given this, coupled with the overbought RSI, a near-term price correction seems likely.

Could a Dip Be a Buying Opportunity?

While a potential correction might bring PEPE’s price down to around $0.000010—its late August high—there are significant support levels at the 50DMA ($0.0000080) and 200DMA ($0.0000094) that could stabilize the price. However, for those looking to enter the market, any upcoming dip in PEPE’s price might present a prime buying opportunity.

If upcoming US economic data, including the ISM PMI surveys and Friday's employment report, ease concerns about a recession in 2025, it could boost risk assets. A scenario where the Federal Reserve cuts interest rates while the US economy remains strong would create favorable conditions for cryptocurrencies. This could set the stage for a strong fourth-quarter performance for Bitcoin and other riskier assets like meme coins, including PEPE.

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