The frog-themed memecoin project, PEPE, has been navigating a descending wedge pattern since May 27, with the current price settling at $0.0000077. Over this period, the token has experienced a substantial decline of 52%. Market analysts predict that the downward trend may persist, as the token appears poised to breach the lower boundary of its descending wedge, signaling a potential continuation of the decline.
What is Happening with Pepe?
A descending wedge formation is characterized by an asset’s price fluctuating between two downward-sloping trend lines. The upper trend line acts as resistance while the lower one offers support. Typically, this pattern is seen as bullish since the price often breaks above the upper trend line upon the pattern’s completion, leading to a rally.
However, PEPE seems to defy this norm. Since August 25, the memecoin has lost 15% of its value, edging closer to the lower line of the descending wedge. If the price dips below this line, it usually nullifies the bullish implications of the wedge formation and indicates a continued downtrend.
PEPE Chart Analysis
The bearish outlook for PEPE is bolstered by its technical indicators. The altcoin is trading below its 20-day exponential moving average (EMA) and 50-day simple moving average (SMA), suggesting a weak market stance. The 20-day EMA shows the average price over the last 20 days, while the 50-day SMA reflects the average closing price over the past 50 days.
Moreover, the Relative Strength Index (RSI) of PEPE remains under its neutral line for most of the past month, currently at 43.13 and falling. The RSI measures whether an asset is overbought or oversold, and the present level indicates low buying interest in the market.
Key Takeaways for Investors
- PEPE is trading below critical moving averages, indicating a weak market position.
- The RSI level suggests low buying activity, reinforcing the bearish outlook.
- A breach below the lower trend line of the descending wedge could lead to further declines.
- Negative online sentiment around PEPE signals a continued price drop.
The prevailing sentiment surrounding PEPE is overwhelmingly negative, with a weighted sentiment score of -0.76. This value indicates that the general online discourse about the asset is predominantly unfavorable, which often correlates with further price declines. Should the bearish trend persist, PEPE’s price might drop to its August 5 low of $0.0000059, marking a 28% decrease from its current value. Conversely, a reversal could see the price climb to $0.0000086.