PEPE cracks crucial support — Will shorting yield gains?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- PEPE depreciated over 20% between 14-16 August, cracking key support.
- Short-term sell pressure spiked, but the weighted sentiment was positive.
Pepe [PEPE] could not contain the recent selling pressure between 14 – 16 August. Although it decoupled from Bitcoin [BTC] in the last few days, BTC’s dip to $28.5k saw the memecoin shed over 20% in two days.
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The drop cracked key $0.00000120 support and saw the PEPE chalked a daily candlestick session close below it on 16 August. If there’s another daily candlestick session close below the level again on 17 August, it will reinforce sellers’ extra leverage.
Will sellers seek more ground?
The drop from $0.00000147 on 14 August to $0.00000113 on 16 August saw the memecoin plunge over 20%. If sellers confirm the $0.00000120 as resistance on the daily timeframe, an extra drop could likely, especially if BTC dips further.
Notably, the correlation to BTC exhibited signs of re-coupling, as shown by the rising slope of the Correlation Coefficient (CC). So, a weak BTC could set the space for further weakening of PEPE.
In addition, the Relative Strength Index (RSI) retreated below the 50-mark, emphasizing the recently elevated sell pressure. But the Chaikin Money Flow (CMF) retreated above the zero mark; a drop below it could confirm further bearish pressure and a decline in capital inflows.
If so, PEPE could drop to the next support at $0.00000105, offering a shorting opportunity with modest gains (11%).
However, a candlestick session close above $0.00000124 will invalidate the above short set-up. Such a move could tip bulls to push PEPE towards $0.00000131.
Sell pressure spiked but network traction tanked
PEPE’s Network Growth, which tracks new addresses, declined from 13 August, indicating the asset began to lose traction on the same day. Over the same period, the Supply on Exchanges spiked, demonstrating increased short-term sell pressure.
How much are 1,10,100 PEPEs worth today?
While the above readings leaned towards sellers, overall weighted sentiment remained positive. It shows market participants had confidence in the asset, which means a price reversal to the upside couldn’t be overruled.
So, traders should track BTC’s price action for a more optimized setup.