The cryptocurrency market experienced a significant downturn following the U.S. Federal Reserve's 25 basis point rate cut, intensifying a mid-December slump. Meme coins, known for their volatility and susceptibility to speculative trading, faced amplified bearish sentiment. Concerns are mounting that PEPE Coin, in particular, could breach the critical $0.00001 level as whale activity and technical indicators signal further downside risks.
Key Market Insights
1. A potential double-top reversal pattern suggests extended corrections below $0.00001.
2. Crypto investors are monitoring potential support zones at $0.000017 and $0.0000128, aligning with the 100- and 200-day exponential moving averages (EMA).
3. Bearish divergence on the Relative Strength Index (RSI) indicates waning bullish momentum.
Whale Movements Drive Fear of Further Declines
Recent data revealed that a prominent whale transferred 150 billion PEPE tokens, valued at $2.72 million, to Binance amidst fears of escalating losses. This move follows the whale's prior withdrawal of 150 billion PEPE ($2.94 million) and 60 billion SHIB ($1.52 million) in late November. Analysis by Lookonchain shows the whale is currently sitting on unrealized losses of $219,000 in PEPE and $136,000 in SHIB, sparking speculation of additional liquidations should market conditions worsen. Historically, such whale exits have triggered sharp sell-offs and bearish market sentiment.
Technical Analysis Highlights Risks
Over the last 48 hours, PEPE's price tumbled 22%, sliding from $0.000022 to $0.0000174. A double-top reversal pattern has emerged on the daily chart, characterized by two major price rejections at a common resistance level, forming an 'M' shape. Furthermore, a lower high on the RSI indicates a weakening bullish trend. Should PEPE break below the neckline support at $0.0000172, selling pressure may intensify, potentially pushing the price down by 55% to $0.0000077.
This bearish outlook underscores the need for caution as the market navigates increased volatility and uncertainty. Investors will closely watch whether PEPE can find support or succumb to broader market pressures.
