Analysis: Signal that gave PEPE a 1,600% rise may be back

Memecoin PEPE continues to be one of the best-performing assets in the recent market volatility. While erratic movements in Bitcoin’s price have forced most crypto assets into bearish technical setups, PEPE’s sentiment remains bullish.

Additionally, a bullish signal has appeared on Pepe’s weekly chart, setting the stage for a 260% breakout rally. The last time such a signal appeared, the memecoin surged 1600% in 98 days and caught the attention of the entire market.

PEPE’s Relative Strength Index (RSI) has hit its lowest level since the memecoin began trading. This suggests that PEPE is under extreme selling pressure and could be on the verge of a reversal.

The Stochastic RSI oscillator shows the lines crossing upwards (marked with circles on the chart). This crossover into oversold territory suggests a potential bullish reversal in the near term, although it needs confirmation from price action breaking key resistance levels.

The current trend still appears to be bearish in the short term, characterized by the falling wedge pattern. But if an upward breakout occurs, this pattern typically indicates a bullish reversal.

If this happens again, PEPE’s price could gain 260% from its current price and reach new all-time highs. And PEPE’s appreciation could impact its ecosystem as a whole, including the largest pre-sale of 2024: Pepe Unchained, which is already worth over $11 million.

PEPE: divergence between price and DAA suggests accumulation

According to data from Santiment, the divergence between PEPE price and DAA (daily active addresses) is positive, meaning that the number of active addresses is increasing. However, PEPE price has been steadily and consistently falling since August 24.

This apparent divergence is due to short-term selling pressure, potentially futures traders shorting the memecoin. The divergence in Daily Active Addresses and price could also indicate more users accumulating PEPE at lower prices, hoping for a future recovery.

The long-term trend of PEPE stock has seen significant volatility and this indicates speculative trading activities with large price swings.

PEPE price may find resistance around the upper boundary of the descending wedge at $0.00001, which is the immediate resistance level. A break above this level would suggest a bullish reversal towards the previous high near $0.00001872.

On the other hand, the lower boundary of the descending wedge, around $0.000007, is the immediate support level. A break below this level could see the price move towards the psychological level of $0.000005.

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