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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- PEPE has a strong bullish bias after reversing from bearish OB to support.
- July’s monthly high is the next target for buyers.
Pepe [PEPE] ranks fourth in the meme coin category CoinMarketCap but has performed commendably in the markets over the past three weeks. Despite a substantial pullback, PEPE had a strong bullish bias on the long-term price charts.
Technical analysis by AMBCrypto has shown strong reasons why PEPE is likely to continue its rally. Still, some on-chain metrics cast doubt on the bulls’ strength.
The bullish breaker block should serve as strong support
Source: PEPE/USDT on TradingView
On PEPE’s one-day price chart, the $0.00000014 area represented a bearish order block as of mid-August. In the diagram above this was highlighted by a cyan box. Furthermore, the $0.00000148 level has been significant since July.
In December, the meme coin managed to speed past this resistance zone due to intense buying pressure, as seen in the volume bars.
Afterwards, the price tested this region again as a support zone and managed to bounce towards the resistance at $0.00000148. This meant that the bearish OB had turned into a bullish breaker block.
The Fibonacci retracement levels (light yellow) noted that the 50% and 61.8% levels have been tested and defended thus far. Combined with the bullish breaker block, it is likely that PEPE can move higher again.
The statistics suggested that the bullish fervor was waning
Source: Santiment
The supply on the exchanges as a percentage of the total volume has been declining since the end of October. This was a strong sign that market participants had been hoarding PEPE and not moving it to CEXs to sell.
However, the average coin age also shows a downward trend. This was in contrast to the previous measure and suggested that the PEPE movement between addresses was significant and foreshadowed selling pressure.
Realistic or not, here is the market cap of PEPE in terms of BTC
Social volume has seen some small spikes in recent weeks, but has not risen higher than prices.
Meanwhile, the MVRV ratio was very positive. This suggested that the meme coin may be overvalued and holders might look to liquidate some of their holdings to make a profit.
