The majority of PEPE holders are suffering losses despite the strong surge! Is Pepe Price forming a bull trap?
As the price of Bitcoin continues to rise recently, trading volume in the altcoin market is also rapidly increasing. At the same time, the meme coin is showing signs of recovery from its previous lows, while the Pepe coin has recorded a noticeably significant rise in the past few hours. Despite Pepe’s rise in value, there are growing concerns that it could remain under pressure for a long period of time due to its lack of on-chain support.
Corrections may occur due to addresses causing losses
According to data from Coinglass, there has been a massive short liquidation in excess of $300,000 on the Pepe market after the price surged from $0.00000125 to $0.0000016 in recent hours. These price surges appear to be encouraging investors to take profits and exit the market, as evidenced by recent on-chain activity.
According to IntoTheBlock, the number of addresses experiencing Pepe’s losses has increased significantly, recently reaching 70,000, or about 42% of all holders. Conversely, the number of profitable addresses decreased by 47%, or 77,000 addresses, indicating a trend toward more frequent losses for new holders.
If Pepe’s value surges further, these loss-making addresses are likely to profit. This potential increase may cause holders to sell their holdings to minimize losses or secure small profits. Such a move could lead to a downward correction in the market.
It’s important to note that a correction in Pepe’s value could result in a long-term squeeze, especially while there is overall upward momentum like now. In such a scenario, long position holders may panic and sell their holdings, potentially causing the value to fall significantly below the immediate support level.
Over the past few hours, Pepe’s long/short ratio has decreased below 1, indicating that short positions are dominant. The market is currently experiencing a correction with 57% short positions putting selling pressure on the market.
What’s next for Pepe Price?
Bulls are preventing Pepe’s value from staying below its 20-day exponential moving average (EMA) of $0.000001337, showing strong buying power at lower prices. The 20-day EMA is currently soaring, and the Relative Strength Index (RSI) is close to the overbought area, predicting an imminent decline. Currently, Pepe price is being adjusted down from a high near $0.0000016. At the time of writing, the price of Pepe is trading at 0.0000015, a surge of over 18.4% from yesterday’s exchange rate.
The bulls would need to push the price above $0.0000016 to take the lead. This could start a new upward trend towards $0.000002. However, now that the price has turned negative, the bears are trying to stop the bullish trend.
A fall below the EMA20 trendline will strengthen bearish positions and trigger selling pressure. In this situation, Pepe price will test the patience of buyers at $0.000001-$0.0000012.