Pepe (PEPE) price hit an all-time high on May 27th. This recently surged following the approval of applications for a major Ether (ETH) exchange-traded fund (ETF) in the United States, which has led traders to consider the Ethereum-based memecoin to be highly traded. A risky, high-reward opportunity.
PEPE price surged 7.60% to a record high of $0.00001725. This is an impressive 88% increase since the U.S. Securities and Exchange Commission (SEC) approved the Ether ETF application on May 20.
Other Ethereum-standard memecoins, including Dogecoin (DOGE), Shiba Inu (SHIB), and Mog Coin (MOG), also saw significant gains following the ETF submission approval.
PEPE fractal suggests a 40% price correction in June.
The ongoing rally in the Pepe market may fizzle out in the coming weeks as the gap between the price rise and the daily relative strength index (RSI) decline widens.
A “bearish divergence” in PEPE indicates that upward momentum is weaker than the upward price movement indicates and could indicate a potential price reversal. This situation is similar to the 40% crash of Memcoin in January, with a noticeable difference between the rising price and the downward trend in RSI.
Additionally, PEPE’s daily RSI is already above 70. This is an overbought area that typically occurs before a price correction or consolidation period. This further increases the risk of selling after a year of good performance in the PEPE market.
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If a correction occurs, the price of PEPE could fall to its 50-day exponential moving average (50-day EMA, red wave) of around $0.00000965 by June, which could represent a decline of around 40% from current price levels. This is similar to the price correction prior to the bearish divergence signal in January.
Conversely, a continued upward trend could cause PEPE to test the 2.618 Fibonacci retracement level near 0.00002203, approximately 32% above the current price level in the coming weeks.
The wealthiest PEPE investors are selling off.
PEPE’s bearish technical outlook is further strengthened by continued profit-making activity from the wealthiest investors.
In particular, during market upturns, the supply of PEPE held by entities with balances exceeding 1 billion tokens decreased. This indicates that these “whales” are selling for the highest prices locally. As a result, the supply of PEPE held by small investors has increased.
Nonetheless, there have been individual instances of traders withdrawing millions of dollars worth of PEPE tokens from exchanges following the recent pump, reflecting an intention to hold on to memecoins instead of selling them at current highs.
However, the impact of this withdrawal on overall whale supply data is yet to be seen, which further heightens the risk of a June PEPE adjustment.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.