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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- PEPE has a strong bullish bias after flipping the bearish OB to support.
- The monthly high from July is the next target for buyers.
Pepe [PEPE] ranks fourth in the meme coin category on CoinMarketCap but has performed commendably in the markets over the past three weeks. Despite a substantial pullback, PEPE had a firm bullish bias on the long-term price charts.
Technical analysis by AMBCrypto laid out strong reasons why PEPE is likely to continue its rally. Yet, some on-chain metrics cast doubts on the strength of the bulls.
The bullish breaker block should serve as a strong support
Source: PEPE/USDT on TradingView
On the one-day price chart of PEPE, the $0.00000014 area represented a bearish order block from mid-August. In the chart above, it was highlighted by a cyan box. Moreover, the $0.00000148 level has been significant since July.
In December, the meme coin managed to rush past this resistance zone due to intense buying pressure as seen on the volume bars.
Thereafter, the price retested this region as a support zone and managed to bounce to the $0.00000148 resistance. This meant that the bearish OB had been flipped to a bullish breaker block.
The Fibonacci retracement levels (pale yellow) noted that the 50% and 61.8% levels have been tested and were defended thus far. Combined with the bullish breaker block, it is likely that PEPE can move higher once more.
The metrics suggested bullish fervor was weakening
Source: Santiment
The supply on exchanges as a percentage of total volume has been falling since late October. This was a strong sign that market participants had been hoarding PEPE and hadn’t moved them to CEXes to sell.
However, the mean coin age has also trended downward. This was in contrast to the previous metric and suggested that PEPE movement between addresses was significant and foreshadowed sell pressure.
Realistic or not, here’s PEPE’s market cap in BTC’s terms
The social volume saw some small spikes in recent weeks but has not trended higher alongside the prices.
Meanwhile, the MVRV ratio was highly positive. This suggested the meme coin may be overvalued and that holders could seek to liquidate some of their holdings to realize profits.
