Pepe Coin, the meme-inspired cryptocurrency, has experienced a rollercoaster ride in recent days. Despite a weekend slump that saw it fall below a key support level, there are signs that a significant price increase could be on the horizon. This potential surge is fueled by a combination of increased whale activity and a developing bullish technical pattern.
Whales Accumulate Pepe, Signaling Confidence?
On-chain analytics firm Lookonchain identified a major transaction on August 18th, where two wallets, believed to belong to the same entity, withdrew a staggering 828.64 billion PEPE ($6.18 million) from the Kraken exchange. This significant buying spree suggests that these “whales,” large investors who can significantly influence market prices, may be anticipating a future price increase for Pepe Coin.
This whale activity aligns with a broader trend of decreasing Pepe reserves on centralized exchanges (CEXs) like Kraken. Data from Coinglass reveals a negative net exchange inflow for PEPE over the past five days, indicating that investors are transferring their holdings off exchanges, potentially in anticipation of a price rise. Binance, a major cryptocurrency exchange, also saw a significant net inflow of PEPE, further bolstering the bullish sentiment.
Technical Analysis Paints a Bullish Picture
While the recent price drop might suggest a bearish market, a closer look at the technical charts reveals a potentially bullish setup. Despite the downtrend characterized by lower highs and lower lows, support seems to be forming around the $0.00000700 price level since August 16th. This formation of small-bodied candlesticks suggests indecision and a possible weakening of selling pressure.
If Pepe Coin price manages to break above this support level and start an upward trend, it could potentially complete a “double-bottom” pattern. This technical indicator is a bullish reversal signal that, if validated, could propel the price of PEPE by 78% to $0.00001600.
Adding further credence to this bullish outlook is the fact that the current support level coincides with the 0.618 Fibonacci retracement level. The Fibonacci retracement is a widely used technical analysis tool that identifies potential support and resistance zones based on historical price movements.
A potential bounce off this support level, coupled with the completion of the double-bottom pattern, could see PEPE skyrocket to the 0.27 Fibonacci extension level of around $0.00002250. This translates to a staggering 200% (4X) increase from the current price.
Is This a Guaranteed Bull Run?
It’s important to remember that cryptocurrency markets are notoriously volatile, and technical analysis is not an exact science. While the current indicators suggest a potential bull run for Pepe Coin, there are still risks involved.
If the price of PEPE fails to hold above the current support level and falls further, it could invalidate the bullish thesis and lead to a steeper decline. The bearish momentum indicated by the MACD indicator underscores this risk.
Conclusion
The recent whale activity and the developing bullish technical pattern suggest that Pepe Coin could be poised for a significant price increase. However, investors should exercise caution and conduct their own research before making any investment decisions. The cryptocurrency market remains unpredictable, and there are always factors that can disrupt even the most promising technical setups.
