The popular memecoin PEPE has been navigating a challenging market, enduring a significant downtrend alongside the broader memecoin sector. While the long-term outlook remains decidedly bearish, recent technical indicators suggest that traders might soon witness a minor price bounce, potentially offering a short-term opportunity within the prevailing downturn.
Sustained Bearish Pressure
PEPE has cemented its position as the worst performer among the top five memecoins, mirroring a sector-wide slump that saw even Dogecoin record a substantial decline. Technical analysis on the daily chart paints a clear picture of bearish dominance, with the price structure maintaining lower highs since late September. Moving averages have consistently formed a bearish crossover, and while the Chaikin Money Flow (CMF) briefly hinted at strong selling pressure, it has since settled into a neutral range, reaffirming the lack of strong buying interest.
Signs of a Potential Short-Term Rebound
Despite the prevailing bearish sentiment, a glimmer of short-term bullishness has emerged. The Stochastic RSI, a momentum oscillator, recently formed a bullish crossover, a signal that often precedes a price rebound when an asset is considered oversold or overextended to the downside. Historical data supports this, as a similar Stochastic RSI crossover in early November led to a 12% rally for PEPE before the downtrend resumed. This pattern suggests a comparable bounce could be on the horizon. Further bolstering the case for a temporary surge is the potential for a short-squeeze. The prolonged downtrend has led to a build-up of short liquidation levels, significantly higher than long leverage. Should a price bounce trigger these liquidations, it could fuel a rapid, albeit brief, rally. Liquidation heatmaps pinpoint the $0.000005-$0.0000055 area as a strong magnetic zone for such a bounce, potentially extending to the $0.000006-$0.0000066 range. Traders might anticipate a 12-15% price increase, but it's crucial to note that this rebound is widely viewed as a prime selling opportunity within the overarching bearish trend.
