The popular asset PEPE has recorded a growth of over 84% recently, according to the analysis presented by Ananda Banerjee this Monday. However, various indicators suggest a risk of a reversal in the price of PEPE that worries investors. This dizzying rise could fade as quickly as it was produced during the last seven days of trading. The current market structure shows signs of extreme fragility that requires constant monitoring by holders.
On the twelve-hour chart, a very clear and promising bull flag formation is observed for many traders. This technical pattern usually attracts traders looking for a continuation of the prevailing trend in the short term. Furthermore, the fifty-period exponential moving average is dangerously approaching the one-hundred-period one, which is usually interpreted as a positive trend change. However, the validity of this structure depends entirely on maintaining critical levels of support near the $0.0000060 value currently.
On the other hand, whale activity tells a very different story than the optimistic price action observed. Large investors have steadily reduced their exposure since late December in a very strategic manner. Around 2.86 trillion tokens have been distributed in the market, which represents approximately twenty million dollars sold by whales. This behavior indicates that the main players are taking advantage of liquidity to exit, generating selling pressure that weakens the current rally of cryptocurrencies.
The silent distribution of assets that threatens to collapse the retail market
Likewise, on-chain coin movement data reinforces the scenario of a possible imminent price drop. The spent coins metric increased drastically during the first days of January according to historical records. This phenomenon occurs when previously stagnant supplies begin to circulate actively, which usually precedes a massive profit taking event. Therefore, the foundation of the current rally seems to be built on bases that are very thin to be sustained over time.
In this way, the derivatives market offers the most logical explanation for this aggressive behavior of the asset. Long positions are extremely saturated compared to shorts within the perpetual futures platforms analyzed. In fact, the cumulative liquidation leverage exceeds two hundred million dollars on the buying side currently. Thus, any modest pullback could trigger a cascade of forced liquidations that would accelerate losses dramatically for enthusiasts.
What levels must buyers defend to avoid a thirty percent drop?
As a result, the support level at $0.0000060 becomes the most crucial point for the asset’s survival. If the price falls below this important psychological mark, the next downside target would be near $0.0000046. This drop would imply a loss of value of almost thirty percent from the local highs reached recently. However, a close above $0.0000072 would completely invalidate this bearish thesis that dominates the sentiment of technical analysts today.
To conclude, although the 84% rally looks impressive at first glance, the underlying data demands great caution. The combination of whale selling and an over-leveraged market creates an environment of high volatility and risk. Investors should be alert to signals of active distribution before making decisions based solely on visual momentum. PEPE’s immediate future will depend on its ability to attract real demand and not rely exclusively on short position liquidations.
