- PEPE retained its higher timeframe bullish structure and was about to flip the H4 structure upward as well
- The boost in trading volume conveyed a bullish conviction
Pepe [PEPE] bulls showed they were no slouches. Despite the market-wide slump over the past two weeks, the meme coin saw a wave of buying that pushed prices higher by close to 70% in five days as of press time.
The Coinbase launch of the memecoin’s perpetual contracts played a part in its recovery. However, there was also reason to be wary of its gains.
The recent lower high was under attack by PEPE buyers
Source: PEPE/USDT on TradingView
PEPE bulls managed to wrest control of the $0.00000581 level from the bears. This was the second sign of strength from the bulls in the past ten days. The first sign was their defense of the 61.8% Fibonacci retracement level.
The buyers did not allow a 12-hour trading session to close below the level. Combined with the flip of $0.00000581 to support, the bullish strength was too much to handle. PEPE exploded higher to test the local lower low at $0.00000796.
At press time, it was trading just below this key level. The RSI was at 70 and showed intense upward momentum. The CMF’s reading of +0.28 also reflected noteworthy capital flow into the market. Overall, further gains were more likely.
Will we see a short squeeze on PEPE?
Source: Hyblock
AMBCrypto analyzed the liquidation heatmap of PEPE using data from Hyblock. The $0.000008-$0.00001 region was filled with liquidation levels of sizeable concentration. The closest and biggest liquidity pocket was at $0.0000084.
A PEPE move just beyond this level would trigger the short liquidation orders. Their market buy orders would force prices higher, hitting an increasing number of short liquidations.
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It could quickly become a liquidation cascade and drive prices above $0.00001 at least momentarily.
Hence, traders need to be wary of short-term volatility. Given the momentum and demand behind the meme coin, further gains were likely and a retracement from $0.0000084 was improbable.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
