Pepe Coin (PEPE), a memecoin that has attracted considerable attention, is once again in the spotlight following the recent exit of BitMEX co-founder Arthur Hayes. Hayes’ decision to sell his PEPE holdings at a loss has raised questions about the coin’s future trajectory. Despite this high-profile exit, on-chain data shows that the broader market appears reluctant to follow suit, potentially signaling a different outlook for PEPE’s price movement in the near term.
In this article, we’ll explore what Arthur Hayes’ sale means for PEPE, the current market sentiment surrounding the token, and key technical indicators that could shape its future price action.
Arthur Hayes’ Exit: A $22,000 Loss
Arthur Hayes made headlines when he entered a position in PEPE in late September, placing a significant bet of $252,680 after the memecoin saw a surge to a monthly high. However, just six days later, Hayes decided to exit his position, selling his entire stash of PEPE at a $22,000 loss. His exit followed a 10% price drop in PEPE over a week, with the token trading at $0.00000886 at the time of his sale.
While Hayes’ decision to sell at a loss might seem like a bearish indicator, the broader market appears to be holding firm. Exchange inflow data suggests that other traders are unwilling to sell PEPE at current prices, pointing to potential resilience among long-term holders.
Market Sentiment: Traders Unwilling to Sell
Despite Hayes’ exit, on-chain data reveals that PEPE exchange inflows have remained subdued. This suggests that the majority of traders are not rushing to sell their holdings, even as the memecoin experiences a price dip. In fact, analytics platform Glassnode reports that over 2 trillion PEPE tokens have been withdrawn from exchanges in the past two days, further reducing the supply available for sale.
The netflows of PEPE also flipped negative after five consecutive days of inflows, indicating a shift in market behavior. With more tokens being withdrawn from exchanges, the short-term selling pressure on PEPE may ease, which could support a potential price recovery in the coming days.
PEPE Price Outlook: Is a Recovery in Sight?
A closer look at PEPE’s one-day chart suggests that the recent price drop could be part of a market correction following significant price volatility in late September. During this period, PEPE experienced a rapid price surge from $0.00000822 to $0.00001156 in just three days, creating a Fair Value Gap (FVG). The recent decline seems to have filled this gap, suggesting that the market has corrected itself.
Currently, PEPE is testing resistance at the midline of the FVG, which stands at $0.00000907. If PEPE can break above this midline, it could indicate that buyers are gaining control, potentially leading to further gains. However, if it fails to break above this level and drops below the support at $0.00000843, PEPE could experience further declines, potentially falling to collect liquidity at $0.00000744.
Technical Indicators: Signs of Bullish Momentum?
Several technical indicators suggest that PEPE may be in a position to recover. The Directional Movement Index (DMI) shows a bullish move, with the negative DI converging with the positive DI. This suggests that the bearish momentum is weakening, while the bullish momentum is beginning to strengthen.
Additionally, the Relative Strength Index (RSI) is currently sitting at 50, indicating that the market is in a neutral state. Traders should keep an eye on the RSI for a bullish crossover of the RSI line above the signal line, which would confirm a shift toward a bullish trend.
Short-Term Resistance and Support Levels
- Resistance: $0.00000907 (midline of the Fair Value Gap)
- Support: $0.00000843 (key support level), $0.00000744 (liquidity collection level)
If PEPE can break through the resistance at $0.00000907, it could set the stage for a stronger upward movement, possibly retesting its recent highs. However, failure to hold the support at $0.00000843 could result in further downside.
Funding Rates and Market Positioning
One bearish signal that traders should consider is PEPE’s funding rates, which have flipped negative. According to Coinglass, PEPE’s funding rate stood at -0.0166%, its lowest level since early August. This indicates that short positions are dominating the market, as traders bet on further price drops.
However, negative funding rates can sometimes lead to a short squeeze. If PEPE experiences a sudden upward price movement, short-sellers may rush to close their positions by buying back PEPE, which could fuel additional price gains.
What’s Next for PEPE?
While Arthur Hayes’ exit may have raised some eyebrows, it hasn’t led to a broader sell-off among PEPE holders. On-chain data shows that traders are largely holding their positions, and several technical indicators point to the possibility of a price recovery.
If PEPE can break through key resistance levels and maintain its bullish momentum, it could bounce back from its recent dip and regain lost ground. However, if the negative funding rates and bearish sentiment continue to weigh on the market, PEPE may face further challenges before any sustained price recovery.
In the unpredictable world of memecoins, anything can happen, and PEPE’s ability to rebound will depend on a delicate balance of market sentiment, technical factors, and external influences. For now, traders should watch key levels closely as the market continues to evolve.
Key Takeaways:
- Arthur Hayes sold his PEPE holdings at a $22,000 loss, but the broader market has shown resilience.
- Exchange outflows indicate that most traders are unwilling to sell PEPE at current prices, potentially reducing selling pressure.
- Technical indicators like the Directional Movement Index (DMI) and RSI suggest that a price recovery could be on the horizon.
- If PEPE can break through the resistance at $0.00000907, it may signal a bullish trend reversal.
- Negative funding rates signal dominance by short-sellers, but a sudden price surge could trigger a short squeeze.
PEPE’s future remains uncertain, but there are promising signs of a potential recovery if market conditions hold steady.
