- Pepe bulls have persisted in defending the 78.6% retracement level.
- With low buying volume present, the momentum has remained neutral, making a strong rally seem unlikely for now.
Pepe [PEPE] experienced a decline in its on-chain metrics but nevertheless achieved short-term gains in the past few days. Active addresses have decreased, and trading volume has been low, with whale activity indicating a tendency to stay on the sidelines.
The price action chart indicates that the crucial Fibonacci retracement level continues to serve as a support. As long as this holds, Pepe bulls can maintain their optimism.
Pepe volatility may challenge swing positions
Source: PEPE/USDT on TradingView
The Fibonacci levels derived from the rally in April and May remain relevant. The 78.6% retracement level has continued to act as support, albeit with occasional short-term deviations.
This situation allows swing traders to establish long positions during retracements.
However, their stop-loss orders should consider the short-term volatility surrounding this level. Additionally, the previous month’s data showed a lack of strong momentum or buying volume, indicating that PEPE might be in an accumulation phase.
A daily close below the $0.000006 mark would signal that bears have taken control. Until then, buyers may continue to accumulate PEPE while awaiting a recovery.
The On-Balance Volume (OBV) has been trending upward since August, enhancing the potential for a Pepe rally.
Will smart money attempt to unsettle positions?
Prices tend to gravitate toward liquidity clusters, with AMBCrypto identifying a significant area around the $0.000006 zone. This point also indicated the lows the meme coin reached on August 5th.
Consequently, traders and investors should brace for a potential rapid decline.
While such a downturn isn’t certain, it appears more likely at this juncture, as not every liquidity pool is effectively tested.
The market sentiment seems to lean bullish in the short term. Following the gains on September 13th, Open Interest increased from $235 million to $273 million.
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Speculators are eager to bet on a long position, anticipating profits from the PEPE movement and displaying bullish sentiment. The slight price dip since that date hasn’t led to a significant decrease in Open Interest, suggesting long positions still expect gains.
This could place them at risk in the next few days if there is a sharp correction in Bitcoin [BTC].
Disclaimer: The information provided does not constitute financial, investment, trading, or other forms of advice and is merely the opinion of the writer
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