- Pepe has formed a bullish structure that could trigger a rally, supported by traders.
- However, technical indicators and derivative market measures suggest that 11% drop could be likely.
PEPE (PEPE) has maintained an upward trend since last week, displaying a cumulative gain of 3.22%.
Although the assets have formed a bullish scheme indicating the potential of the increase, several other market signals do not align with these prospects.
Ambcrypto has analyzed the key factors that could hinder a potential rally and those who support the movement more.
Pepe forms a bullish upward motif
On the 4 -hour graphic, Pepe exchanged in an upward triangle motif, characterized by a level of horizontal resistance and an ascending support line converging.
As a rule, when prices oscillate in this structure, an upward escape often follows, vosing the resistance line.
A close look at the graph below reveals that each time Pepe approaches this level of resistance, he produces prominent wicks rather than full-bodied candlesticks.
This behavior suggests high sales pressure in terms of resistance, which could start a decline.
But that’s not all. Additional measures also indicate an increase in downward pressure.
Source: tradingView
In addition, the formation of a death cross – where the 20 -day SMA slipped under the 200 -day SMA – adds to the lowering feeling.
At the time of writing the editorial’s moment, the 20 -day SMA crossed the 200 -day SMA, pushing the price to the level of support of the model.
The accumulation / distribution indicator (A / D) also confirms this downward trend, showing that the market has entered a distributive phase. In this phase, participants are starting to sell the assets, which makes it downward.
Source: tradingView
The momentum passes as the volume drops despite the price increase
In addition to that, the dynamics of the volume showed fatigue.
While PEPE increased 1.49% in the last 24 hours, the negotiation volume dropped by 36.4%. This divergence from the price volume generally suggests a weak rally with the discoloration of follow -up.
Derivative traders could also contribute to the decline of Pepe.
The funding rate, which indicates which market segment is more dominant, has become negative at -0.0097. This shows that the sellers uncovered are in control, paying periodic costs to maintain their positions.
Source: Coringlass
Spot traders accumulate
Despite the wider sales pressure, the spot traders continued to accumulate the same. During last week, they bought $ 37 million in the asset.
This figure is significant because the last major accumulation occurred on March 3, when $ 53 million in Pepe was moved to private wallets.
Source: Coringlass
Given the lowering feeling, this recent accumulation seems to be a strategic decision of traders who seek to capitalize on lower prices.
Overall, the activity of trader in cash could slow down the same decline when they continue to accumulate during the decline.
