PEPE’s $84M perp inflow fuels 12% price rally – But there’s a catch!

Pepe [PEPE], the fourth most valuable memecoin, with a market capitalization of $1.19 billion, has recorded one of the biggest gains among the top memecoins, rising 12% in the past 24 hours as of writing.

The memecoin has maintained a struggling performance that has kept it subdued for weeks, with its 30-day performance remaining neutral at 0.0% on the chart.

The price direction for PEPE from here depends on capital flow into the asset across the spot and perpetual markets. AMBCrypto has analyzed this flow.

The perpetual flow is key

The perpetual flow could play a key role in determining whether PEPE sustains its rally or breaks down from this level.

Prior to its 24-hour move, there had been a contraction in flow in the perpetual market for PEPE as more capital was being pulled out. In the last fifteen days, the total outflow accounted for $17 million. A constant outflow in this case reflects investors’ conviction and implies that they were bearish.

However, the sentiment has changed, with CoinMarketCap’s price sentiment for PEPE hitting 4.89, which is very bullish. This has been reflected in capital inflows, with the net inflow rising to $1.10 million following a total perp inflow of roughly $84.44 million.

Likewise, Open Interest has also aligned closely with the price increase, rising 8.18% to $219.23 million. With leveraged capital growing alongside the funding rate, it suggests that the perpetual market is anticipating a rally.

Does PEPE’s spot traders align?

A rally usually holds when demand extends beyond the perpetual market and spot capital also flows in the same direction.

The spot market is yet to fully align with this direction. Between the 18th and 19th of August, net sales of PEPE reached approximately $2.65 million, according to CoinGlass spot netflow.

The most important part of these sales is that traders sold the majority on the 19th of August, with $2.31 million worth of PEPE accounting for roughly 87% of the total sales.

In the past 24 hours alone, total net accumulation has reached roughly $660,170 in netflow.

This implies that there is ongoing buying in the market; however, capital accumulation needs to grow much larger to at least cover the net sales recorded over the past two days.

If spot flow continues to surge at this scale, it would imply that investors in the market are very bullish, potentially fueling the ongoing rally.

Pepe’s liquidation map suggests…

The liquidation heatmap does not show any major level to watch at the time of writing. The one-month heatmap shows that traders have already filled most of the sell orders around the current price level.

However, the next clearest level with some liquidity clusters on the chart is around $0.0000026, where buy orders lie.

The depth at this level, however, remains very minimal, meaning it likely won’t have enough pull on the price, as clusters typically do.

With no cluster above it showing a similar depth, the market now relies solely on a momentum-driven rally and the direction bias among traders, at least until clear cluster levels form again.

Final Summary

• PEPE’s perpetual market has turned bullish as netflows and open interest rise alongside its latest price increase.

• Spot demand remains weaker, with recent net sales outweighing the latest $660,170 in net accumulation.