[This Week’s Bull Squeeze Alert: PEPE May Face a Massive Crash]

The meme coin PEPE has performed well in the cryptocurrency market, ranking among the top in both daily and weekly growth. However, the coin may face price pressure this week and risk a collapse.

The soaring price of PEPE has brought huge returns to early investors, attracting more traders to enter the derivative financial product market to seize long positions. Currently, PEPE’s open interest reaches US$510.35 million, accounting for 16.4% of the market capitalization of US$3.11 billion, showing the importance of derivative financial product transactions to this currency.

PEPE's 24-hour derivatives trading volume reached $6.7 billion, up 81%, outpacing its own 41% gain to $0.00000755.

PEPE faces liquidation risk. Each long contract has a certain liquidation price. If the price exceeds these levels, the tokens will be forced to be sold, which may cause the price to fall further and form a spiral collapse.

A liquidation heat map provided by CoinGlass shows that there is a lot of liquidity around the $0.000001 price level, potentially attracting traders and market makers to cash in on the hype.

A sudden drop could trigger a cascade of liquidations, causing the price to fall to $0.000001, a drop of 85%.

Still, PEPE may still have room to rise if there are sufficient inflows in the coming days. Traders and memecoin speculators need to pay attention to the volatility of these digital assets and operate with caution.

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