Memecoins
Meme mania returns as PEPE jumps by 80%, but there are concerns
In the last week, meme coins PEPE and FLOKI have seen the most rally in price. However, analysts have warned that the sudden growth in the values of meme coins is often followed by a general market correction.
- In the last week, PEPE’s value has increased by over 80%.
- Analysts believe that it marks the beginning of an impending general pullback in the market.
Pepe [PEPE] and Floki [FLOKI] meme coins have led the rally in the cryptocurrency market over the past week, both climbing by over 80%, data from CoinMarketCap showed.
Is your portfolio green? Check the Pepe Profit Calculator
However, in a recent post on X (formerly Twitter), crypto analyst Ran Neuner warned that this could be a sign of an upcoming pullback in the general market.
If you want to know when a pull back is coming, just watch $PEPE. It’s literally an index for when the market is getting overheated. When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time. pic.twitter.com/vMcqiddHwp
— Ran Neuner (@cryptomanran) October 26, 2023
Neuner’s warning was based on the historical observation that PEPE has often surged ahead of major market pullbacks. For example, in September 2023, Pepe rallied by over 1,000% between 22 and 30 September.
During the same period, BTC’s value crashed by almost 5%.
This $PEPE pump is another indicator of upcoming #BTC dump.
I am speaking with experience, you can check past price movements.
Pumping coins like $PEPE, $DOGE, $XRP, $IMX, $LINK always indicates the bloodbath, let's see how it goes this time. pic.twitter.com/piseCxRiqD
— Alex RT₿ (@rutradebtc) September 22, 2023
PEPE market is overheated
At press time, the popular meme coin exchanged hands at $0.000001215. The token’s key indicators observed on a daily chart hinted at a strong possibility of a price reversal in a few days.
As of the writing, PEPE’s price was stationed above the upper band of its Bollinger Bands indicator. This indicator is used to identify overbought and oversold conditions in a market, as well as potential trend reversals.
Typically, when an asset’s price climbs above the upper band of this metric, it suggests that the asset is overbought. It means that the price has rallied significantly above its average, and traders often interpret such movement as a potential reversal signal; hence they begin to dump in anticipation.
Indicators agree
Momentum indicators were also pegged at overbought highs at the time of writing. PEPE’s Relative Strength Index (RS) and Money Flow Index (MFI) were 71.57 and 84.32, respectively.
These levels are typically marked by buyers’ exhaustion, where accumulation slows, and distribution grows as traders begin profit-taking.
Further, meme coins are notorious for their severe price fluctuations over little periods of time. An assessment of a few volatility markers on the PEPE’s daily chart revealed that its price was prone to volatility.
For example, the token’s Chaikin Volatility indicator has trended upward since 22 October, when its price commenced the rally.
This indicator measures the difference between an asset’s high and low prices over a specified period. Generally, when the Chaikin Volatility indicator rallies to return higher values, it signals great price movements and potential volatility.
This indicator was 223.40 at press time, having climbed by over 1000% in the last seven days.
Realistic or not, here’s PEPE’s market cap in BTC terms
During the same period, the token’s Average True Range (ATR) has risen. This indicator measures market volatility by calculating the average range between high and low prices over a specified number of periods.
At 0.00000011 and in an uptrend at press time, the ATR hinted at the possibility of significant price swings in the coming days.
Source: PEPE/USDT on TradingView
