The rise in the cryptocurrency market, starting with Bitcoin, has led to significant developments in memecoin projects. Accordingly, the price of Pepe (PEPE) reached a record high on May 27; a surge driven by the recent approval of Ethereum exchange-traded fund applications in the US, leading investors to view Ethereum-based memecoin projects as high-risk reward opportunities.
PEPE Continues to Set Records
PEPE’s price increased by 7.60%, reaching an all-time high of $0.00001725. This marks an impressive 88% rise since the US Securities and Exchange Commission approved Ethereum ETF applications on May 20. Dogecoin, Shiba Inu, and Mog Coin (MOG), among other Ethereum standard memecoin projects, also recorded significant increases following the ETF application approvals.
The ongoing rise in the Pepe market may deplete in the coming weeks due to the increasing gap between rising prices and the falling daily relative strength index (RSI).
PEPE’s downward trend indicates that the bullish momentum is weaker than the rising price action suggests, signaling a potential price reversal. This situation is similar to the 40% drop in memecoin projects in January, which occurred after a noticeable divergence between rising prices and declining RSI trends.
Additionally, PEPE’s daily RSI has already exceeded 70, known as the overbought zone that typically precedes a price correction or consolidation period. This increases the risk of a sell-off following PEPE’s strong performance throughout the year.
What is Happening on the PEPE Front?
In the event of a correction, PEPE’s price could drop to around $0.00000965, a 40% decrease from current levels, by June, aligning with the price correction before the January downtrend signal. Conversely, a continued uptrend could see PEPE test the 2.618 Fibonacci retracement level around $0.00002203, a 32% increase from current price levels in the coming weeks.
PEPE’s bearish technical outlook is further strengthened by ongoing profit-taking activities of its wealthiest investors. During the market uptrend, the PEPE supply held by entities with over 1 billion tokens has decreased. This indicates that whales are selling at local price peaks. Consequently, the PEPE supply held by smaller investors continues to increase.
