Over the past two weeks, the cryptocurrency market has recorded significant gains. Amid this, memecoins are leading the way with impressive gains.
One of the prominent memecoins is Pepe [PEPE], which has been experiencing a steady rise over the past two weeks.
In fact, at the time of writing, PEPE is trading at $0.0000114. This is a 44.8% increase on the monthly chart, with the uptrend extending 39.07% over the past week.
Despite these gains, memecoin is still far from its recent high of $0.00001314. It is about 32% off its all-time high (ATH) of $0.000017.
Therefore, the current market conditions raise the question of whether PEPE’s recent bullish momentum will be sustained or if the memecoin will undergo a correction.
Pepe's RSI Reaches Overbought Levels
According to TinTucBitcoin analysis, PEPE is showing strong bullish momentum, with bulls dominating the market.
However, its RSI has reached overbought levels at 76.5, which often signals a potential reversal of the current trend.
In this context, an overbought condition usually indicates that the bullish momentum may be running out of steam and that a reversal or correction is likely.
While overbought conditions suggest the possibility of a price decline, this does not guarantee a reversal.
So, even though RSI is overbought, our analysis shows that PEPE is in a strong bullish momentum. In such a situation, a short-term reversal is unlikely.
What Does The PEPE Chart Mean?
While the RSI suggests a potential reversal, it is important to consider what other fundamental indicators suggest.
First of all, Pepe's corrective price DAA divergence has remained positive throughout the past week.
This shows that Pepe's active addresses are increasing, demonstrating increased user interest and activity, even though the price does not yet reflect that.
PEPE is gaining traction and could see further price increases.
Additionally, Pepe’s Aggregate Funding Ratio across Exchanges has also remained positive over the past seven days, indicating that traders holding long positions are paying a premium to those holding short positions.
The fact that investors are willing to pay a premium to hold their positions shows confidence in the future value of this memecoin.
Ultimately, this positive market sentiment is reflected in higher liquidations for short position holders compared to long position holders.
Short-term traders have faced extreme liquidation over the past four days.
Therefore, based on our analysis, even though Pepe's RSI has reached overbought levels, memecoin's uptrend remains strong.
This means it will maintain that level for a while before the price starts to fall.
Therefore, if the current conditions hold, Pepe will attempt to reach the next significant resistance level at $0.0000119. Therefore, a correction would see memecoin drop to $0.000009847.
