#Breaking_Crypto_News #pepe⚡ #crash
The meme coin mania is back in the cryptocurrency market, and cryptocurrencies like PEPE show signals of being overvalued. This could foreshadow a long squeeze, as suggested by increased open interest (OI), high funding rates, and accumulated liquidations downwards.
Previously, the meme coin boom marked a local top, followed by a market crash and significant long-position liquidations. Should a similar pattern play out, this asset class is at the peril of suffering another hit despite positive social activity from influencers.
As of this writing, PEPE has $736.69 million in open interest, ranking fifth on CoinGlass. This value represents 11% of the meme coin’s $6.39 billion market cap, trading at $0.0000151. Notably, PEPE’s OI is larger than the open interest on XRP, which has a $29.73 billion market cap.
Despite a drop of 37.82% in the $3.07 billion 24-hour volume, the market’s open interest is surging by 8.85% on the meme coin.
PEPE funding rates and potential long squeeze
In particular, the consolidated exchanges’ funding rates for PEPE indicate an open interest weighted to long positions. Currently, long-position traders pay an APR of 52.66% to PEPE short-sellers as a mechanism to remedy derivatives imbalances.
This high funding rate could accelerate a long squeeze to the meme coin or, at least, incentivize traders to close these bullish positions.
Moreover, the one-week liquidation heatmap shows a likely liquidation price target of $0.0000107 per token to leveraged PEPE traders. Therefore, the meme coin could be set for a long-squeeze crash if sentiment shifts from bullish to bearish.
A price drop to this target would result in 30% losses to traders buying PEPE at current levels.
Still, the meme coin could continue upward if enough capital flows into it in the following days. Cryptocurrency traders and speculators must understand the volatile nature of these digital assets and act cautiously moving forward.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
