Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- PEPE was trading within a range, but buyers could be overwhelmed by a wave of selling pressure if BTC falls
- Short sellers can wait for a retest of former support zones to look for selling opportunities in the event of a downside move
Bitcoin [BTC] has traded within a range that spanned from $29.8k to $31.5k. Prices have been at their lowest levels this past week, which did not bode well for bullish traders. This could have major consequences for Pepe [PEPE] also.
Read Pepes [PEPE] Price Forecast 2023-24
PEPE’s price action over the past month has also been limited to a range formation. Traders must decide whether retesting the marked support levels was worth the risk. The on-chain stats and price action suggested buyers were weak – will this force a breakout below the range? Here’s a PEPE price prediction that explores the different scenarios that are likely to unfold over the coming months.
PEPE is stuck within a range as the consumed age begins to decline
Source: PEPE/USDT on TradingView
The 1-day price chart showed that PEPE was trading within a range that stretched from $0.00000136 to $0.00000185. A difference of almost 36% was measured from the low to the high range, suggesting that a lot of volatility was present during the time PEPE was in the range.
This volatility was more visible on the lower timeframes. If we focus on the daily chart, we can see that trading volume started to dry up as July progressed. In addition, the market structure was bearish and the bulls were unable to defend the $0.0000016 mid-range support.
The support level of $0.00000148 (orange dotted) has been important since late June, but at the time of writing, prices have started to fall below this level. The RSI fell below the neutral 50 on July 18, which could have been an early signal that the bears were strengthening. The OBV also fell in July, indicating a lack of buying pressure.
PEPE can be bought at the $0.00000148 and $0.00000136 support levels, targeting the high range of $0.00000185. However, traders should also be prepared for a slump below the range lows.
Source: Sanitation
The inflow and outflow of the stock exchange was somewhat incongruous on 14 July, with more outflows than inflows. In the days that followed, the flow of exchange greatly favored neither side. The 30-day MVRV ratio was on a downward trend in July. The negative readings at press time showed an undervalued asset.
This does not mean that prices will rise immediately. Active addresses have started to fall in recent days, suggesting that demand could also ease. It would be difficult for bulls to run a rally without user participation.
The age metric used saw sharp spikes around July 14, suggesting that a major selloff was underway. Since then, this metric has seen no noticeable upside, suggesting that short-term selling pressure has not peaked yet.
PEPE prices have been in a downtrend in the lower time frames, but will this result in a break below the range?
Source: PEPE/USDT on TradingView
The price action has had a bearish bias on the H4 chart since July 17. Momentum and selling pressure have also been on the bearish side over the past week. PEPE made a series of lower highs after falling below the mid-range support at $0.0000016. At the time of writing, it was on the verge of losing the $0.00000148 support as well, and trading volume has been low for the past week.
Still, the price was in a place where PEPE bounced to the top ranks on July 12. Therefore, the recent losses represented a low-risk buying opportunity for bulls. Even though it’s a contrarian trade, the reward outweighed the risk.
The next 12-24 hours could tell whether Pepe prices will recover or fall further
When trading a range, it is usually better to expect the range to persist than to anticipate a breakout every time the price approaches the extremes. Therefore, the argument behind buying PEPE is simple: it is almost low. If buyers are unable to force a response this week, a move below the lows of the range can be anticipated.
In such a scenario, a retest of the $0.00000136 area as resistance presents a short selling opportunity, targeting the support of the next higher time frame at $0.000001.
Source: Coin analysis
Coinalyze’s 2-hour chart showed that Open Interest has been relatively flat since July 17. After July 21, PEPE prices fell slowly but steadily and the OI guided prices down. This emphasized bearish sentiment and discouraged longs.
The funding rate remained positive, but started to fall in recent hours. While it showed positive sentiment, the OI generally gave a clearer picture of speculator sentiment.
Realistic or not, here is PEPE’s market cap in terms of BTC
Sentiment in the market was generally not positive. Many altcoins are trading in key support zones, but a move higher was not guaranteed. With Bitcoin bulls unable to return to $31.5k over the past week, it seemed that the bulls were approaching exhaustion and could soon be surpassed.
With further losses for PEPE, the meme coin is likely to drop to the $0.000001 support level. This was where the previous rally started in mid-June, and prices could fall there in search of buyers.
