Analyzing Pepe’s chances of a bounce back
- The Fibonacci level indicated that PEPE could be ready for a recovery.
- The token momentum remained in a bearish state.
Pepe’s [PEPE] performance might have left holders hanging in confusion. But for traders who have been watching the meme’s technical outlook, it could soon be time for a rebound. Twitter-accustomed analyst, Altcoin Sherpa opined that the meme was already forming a mid-term bottom.
How much are 1,10,100 PEPEs worth today?
Backing up his viewpoint with reasons, the analyst noted that the token was already headed toward the .50 Fibonacci retracement level.
$PEPE: Nothing has changed from my original idea of this chopping from here and the .786 fib.
I think that this is forming a bottom though in the mid term and this is going to go to at least the .50 fib.
*I still have PEPE and am just sitting on that position for now. pic.twitter.com/CwC73a5gYU
— Altcoin Sherpa (@AltcoinSherpa) May 23, 2023
Eyes on the stepping-stone
Needless to say, the most popular retracement levels include 23.6%,38.2%, 61.8%, and 78.6%. However, the .50 fib or 50% level represents a significant level of support or resistance which could lead to a bounce in the asset price before continuing in the original direction.
In line with Sherpa’s thoughts, PEPE’s weighted sentiment left the negative region on 19 May. When this metric is positive, it means that investors’ hope has renewed.
When the opposite occurs, it implies that market participants were not optimistic about the cryptocurrency’s performance. Despite that, PEPE’s volume came down to 183.03 million.
This may, however, be detrimental to PEPE’s potential recovery since a hike in volume could have provided strength behind the meme value.
Meanwhile, PEPE’s daily on-chain transaction volume in profit was 14.19 trillion. On the other hand, the daily on-chain transaction volume in loss was close to 13.69 trillion.
With this difference in metric, it means a large number of those involved in these transactions could not acquire the token when the hype and superb performance were still in place.
PEPE: The bears still have it
At press time, the token had lost 8.16% of its value in the last seven days. But how about its momentum? Based on the four-hour chart, the Awesome Oscillator (AO) was swinging below the histogram line.
The AO, used as an indicator to measure recent and historical market momentum, was zero in the negative axis. Often used to compare two moving averages, the indicator signals that the current PEPE momentum was bearish.
Read Pepe’s [PEPE] Price Prediction 2023-2024
For the Directional Movement Index (DMI), the technical outlook suggested that it could take a long while for PEPE to revive. At the time of writing, the +DMI (green) was at 12.49. However, the -DMI (green) was at 25.46.
The Average Directional Index (ADX), on the other hand, was at 25.76. And since the ADX (yellow) was above 25, it indicated that there was strength behind the bearish direction.