Pepe price teeters on edge of a breakdown as risky pattern forms
Pepe price has underperformed the market recently amid weak demand, and a risky chart pattern points to a bearish breakdown.
- Pepe crypto price has formed the highly bearish head-and-shoulders pattern.
- Its volume in the spot and futures market has plunged this year.
- Pepe has lost its correlation with Ethereum.
Pepe Coin (PEPE) was trading at $0.00001070 on Monday, Aug. 19, much lower than the July high of $0.00001470.
Risky chart pattern points to a Pepe price crash
The daily chart shows that the Pepe Coin price has remained under pressure in the past few days. After rising to a high of $0.00001470 in July, it has cratered by 25% to the current $0.00001070.
The coin has fallen below the 50-day and 100-day moving averages, a sign that bears have prevailed. Worse, it has formed a head-and-shoulders chart pattern, a popular bearish reversal sign.
Pepe is now hovering near the neckline at $0.000010. A break below the neckline will provide hints of potential downward momentum, potentially to the key support at $0.000008260, its lowest level in June of this year.
The bearish Pepe price forecast will become invalid if it rebounds and flips the right shoulder at $0.00001470. Such a move will confirm more gains and potentially move it to the head section at $0.00001632.
Pepe Coin fundamentals are deteriorating
Pepe crypto price may also crash because of its deteriorating fundamentals. Data shows that whales have paused buying Pepe, with their current holdings at 8.34 trillion. The amount has remained intact since August 14.
Pepe’s volume in the spot and futures markets has waned in the past few weeks, a sign of waning demand. While the 24-hour volume rose to $683 million, it remains much lower than its historical levels. In most cases, Pepe tends to have a 24-hour volume of over $1 billion.
CoinGlass data shows that the futures open interest has tumbled from $992 million in July to $642 million. Falling futures interest is a sign of low demand among traders.
Additionally, Pepe has lost its correlation to Ethereum (ETH). It recently remained in a tight range even as Ethereum surged to the highest level in over three years. Historically, Pepe coin price has surged whenever ETH was rising because it is the second-biggest meme coin in its ecosystem.
