PEPE faces historic bearish signals – Do the bulls have a chance to reverse?

In the past 24 hours, PEPE has maintained a downward trend, recording a slight loss of 1.06%. Analyzing the price fluctuations of this memecoin shows a contrast between two groups of traders: while spot traders continue to accumulate, the derivatives side is increasing selling pressure, especially as the number of Short contracts rises sharply across the market.

In fact, according to an analysis by Bitcoin Magazine, the market can fluctuate in both directions. However, it is noteworthy that two technical indicators are suggesting that the bulls may reverse the situation and regain momentum.

Historical Bearish Signals

Analyzing Bollinger Bands on the daily timeframe shows that PEPE is trading near the upper band – a place where significant selling pressure frequently occurs, leading to strong corrections of this altcoin.

Historical data shows that every time PEPE reaches this zone, the price drops significantly. In the last three instances, PEPE lost 49%, 28%, and 46% of its value after reaching this level.

PEPE/USDT Daily Chart | Source: TradingViewIf this pattern continues to repeat, PEPE may face a deep correction, even dropping by several tens of %. At that point, this cryptocurrency risks returning to trade below the downtrend line – the resistance level that PEPE had previously broken through.

PEPE/USDT Daily Chart | Source: TradingViewTypically, breaking above a downtrend line is a signal for a strong rally. However, this time, PEPE is showing sluggishness and struggling to establish solid upward momentum, indicating that downside risks still remain.

In addition, Bitcoin Magazine also notes a clear divergence between derivative traders and spot traders regarding the upcoming prospects of PEPE.

Futures and spot traders have opposing views

In the past 24 hours, these two groups of traders have taken opposing actions regarding the price of PEPE. While derivative traders are betting on a price decline, spot traders continue to buy in despite the downward trend.

In the derivatives market, the open contract (OI) and the trading volume simultaneously decreased by 1.65% and 39.46%. This indicates that the market is being dominated by bears, while the overall momentum is weakening. At the time of writing, the total value of unsettled contracts in the market is 233.96 million USD.

Selling pressure from the bearish side in the derivatives market can play an important role in keeping the price of PEPE low or even pulling the price down further.

Source: CoinglassConversely, spot traders are seizing the opportunity to accumulate PEPE. In the past 24 hours, this group has purchased PEPE worth 4.4 million USD, helping to prevent a further sharp decline in price.

Typically, when there is a significant amount of buying from the spot market, it signals strong confidence from the bulls. This activity can absorb selling pressure and lead to a price recovery on the chart.

Where will PEPE go?

Finally, Bitcoin Magazine has expanded its analysis by considering additional technical indicators to determine the potential price trend of PEPE. The data indicates that the accumulation process is still ongoing, while liquidity continues to flow into this asset – suggesting the possibility of an imminent breakout.

The Accumulation/Distribution indicator ( reflects that the market is still in the accumulation phase, with positive signals from the measured data.

![pepe-tang])https://img.gateio.im/social/moments-b4165f4edae2486087402e8f675683f9(Source: TradingViewMeanwhile, the Money Flow Index )MFI( – an index that tracks the flow of liquidity in and out over a certain period – also reinforces this observation by showing that money is flowing strongly into PEPE. This is clear evidence that buying pressure still prevails.

In the current context, PEPE could break out of its historical downtrend and establish a new peak, especially as spot traders continue to increase accumulation.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions.

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