Pepe [PEPE] continues its bearish trend after falling 10% in seven days, trading at $0.00000886 at press time. Trading volume is also stagnant after falling 16% in the past 24 hours according to CoinMarketCap.

PEPE's recent price drop has prompted BitMEX co-founder Arthur Hayes to exit his trade.

As previously reported by TinTucBitcoin, Hayes placed a $252,680 bet on PEPE on September 27 after the price hit a monthly high.

However, after six days of holding memecoin, Hayes deposited his entire holdings to exchanges at a loss of $22,000 according to SpotOnChain.

Despite the sell-off, inflow data shows other traders are not willing to sell PEPE at current levels.

According to on-chain analytics platform Glassnode, more than 2 trillion PEPE tokens have been withdrawn from exchanges in the past two days. PEPE's net outflow also turned negative after five consecutive days of inflows.

The increase in exchange outflows reduces short-term selling pressure on PEPE, which could support a price recovery.

PEPE Price Outlook

Looking at the PEPE one-day chart shows that the recent decline could be a market correction following the sudden price movements in late September.

After PEPE rapidly moved from $0.00000822 to $0.00001156 in three days, it created a Fair Value Gap (FVG). The recent price drop has filled this market imbalance. This puts memecoin in a unique position for a price recovery.

PEPE is currently testing a resistance at the midline of this FVG at $0.00000907.

If it breaks above this mid-line, it could be seen as a confirmation that buyers are taking control, opening the door for further upside.

After filling this gap, the Directional Movement Index (DMI) took a bullish move with the negative DI converging with the positive DI.

This move suggests that bearish momentum is weakening while bullish momentum is strengthening.

Furthermore, the Relative Strength Index (RSI) at 50 shows that the market is in a relatively neutral state.

Traders should look out for a bullish crossover of the RSI line above the signal line to confirm the uptrend.

If the coin fails to break the FVG midline and drops below the support at $0.00000843, it could decline further to gather liquidity at $0.00000744 before making a decisive move.

Funding rate turns negative

The PEPE funding rate has turned negative and stands at -0.0166% at press time according to Coinglass. The metric is now at its lowest level since early August.

This data shows that short positions are dominating the market as traders bet on further price declines.

While this is a bearish signal, a sudden price move to the upside could trigger a short-term rally as short sellers buy PEPE to close their positions. This would push the price further up.