Pepe memecoin has reached a record high, but threatens a 40 percent crash until June
The price of PEPE rose to a record high on May 27, following the recent approval of Ether (ETH) exchange-traded fund (ETF) documents in the US, prompting traders to see Ethereum-based memecoins as high-risk, high-reward opportunities.
PEPE price increased by 7.60%, reaching an all-time high of $0.00001725. This represents an impressive 88% increase since the US Securities and Exchange Commission (SEC) approved Ether's ETF filings on May 20.
Other Ethereum-standard memecoins, including Dogecoin (DOGE), Shiba Inu (SHIB) and Mog Coin (MOG), have also recorded significant gains following ETF filing approval.
The PEPE fractal hints at a 40% price correction in June
The sustained run in the PEPE market may fizzle out in the coming weeks as the gap between rising prices and the daily Relative Strength Index (RSI) widens.
PEPE's “Bear Divergence” indicates that the upward momentum is weaker than the rising price action and may signal a price reversal. This situation is similar to the 40% crash of memecoins in January, which followed a divergence between the rising price and the RSI trends.
Additionally, when PEPE's daily RSI crosses above 70, an overbought area typically precedes a price correction or consolidation period. This further increases the risk of selling after a strong performance in the PEPE market.
RELATED: Trader Makes $2.7M in 3 Days on Trump-Themed MAGA Memecoin
During a correction, the price of PEPE may fall to the 50-day moving average (50-day EMA, red wave) in June to $0.00000965, which is a 40% decrease from the current price level. That's similar to the price correction before the winning margin signal in January.
Conversely, continued growth could see PEPE test the 2.618 Fibonacci retracement level towards $0.00002203 in the coming weeks, a roughly 32% increase from current price levels.
Very wealthy PEPE investors are throwing.
PEPE's bearish technical outlook is reinforced by the investors' profit-taking activity.
In particular, the supply of PEPE held by entities with balances above 1 billion tokens decreased during the market upturn. This indicates that these “whales” have been selling at local inflation. As a result, the supply of PEPE held by small investors has increased.
However, there have been individual cases where traders have withdrawn millions of dollars worth of PEPE tokens from exchanges after the latest pump, reflecting their desire to hold onto memecoin rather than sell at current highs.
The impact of these withdrawals on overall whaling supply data is yet to be seen, however, this increases the risks of a PEPE correction in June.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
