PEPE consolidates August gains: What now?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- PEPE consolidated recent gains above $0.00000120.
- PEPE’s network traction dipped and could affect bulls.
Most traders shifted focus to memecoins in the first half of August – for good reason. Memecoins have outperformed Bitcoin [BTC] and most altcoins as of the time of writing.
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Tier-1 memecoins like Shiba Inu [SHIB] posted over 30% gains in early August compared to BTC’s +2% over the same period. Similarly, Pepe [PEPE] offered +25% gains, but on-chain metrics printed negative readings over the weekend (12 August).
In the meantime, BTC’s sharp mid-week reversal forced most altcoins to reverse recent gains. But PEPE opted to consolidate its recovery gains above $0.00000120. Although it signals the possibility for a further rally, there was a caveat to such a projection.
H4 market structure was bullish
The H4 market structure was flipped bullish after PEPE closed above $0.00000120. At the time of writing, price action forayed above the most recent high of 0.00000129, and a session close above the level on higher timeframes could position PEPE bulls for more gains.
But there are overhead roadblocks worth acknowledging. An H12 bearish breaker block exists at $0.00000136 – $0.00000155 (red). For perspective, breaker blocks are invalidated bullish order blocks and act as support-cum-resistance zones. They can inflict price rejections if the rally isn’t strong enough.
Considering this, PEPE could face challenges at the above roadblock, especially if BTC fails to exceed $29.5k in the short-term.
However, the memecoin has been consolidating between $0.00000120 – 0.00000129 over the last few days. It makes the zone a key interest level for bulls in case of a retracement should PEPE falter at the overhead roadblock.
Meanwhile, the RSI and CMF were positive at the time of writing, indicating bullish bias amidst improved buying pressure and capital inflows.
Network Growth and Supply on Exchanges eased
Unfortunately, some on-chain metrics disagreed with the positive readings from the price chart indicators. In particular, Network Growth, which measures network traction and new addresses, declined significantly after peaking on 9 August.
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Similarly, the 90-Mean Coin Age has been in decline since late July, capturing massive distribution over the same period.
But Supply on Exchanges dipped in August, suggesting eased selling pressure. But there were few spikes in the metric as of the time of writing, illustrating a potential build-up of sell pressure if short-term holders opt to lock in gains when PEPE hits the overhead roadblock.