Pepe Coin Price Faces Continued Downside Amid High Correlation with ETH Movement

• Pepe’s price is showing continued downside potential, with strong correlation to Ethereum’s negative trend.
• Futures market data indicates an increasing number of short positions on PEPE, suggesting potential for further price declines.
• If PEPE breaks above the $0.00000885 mark, there could be a shift towards a bullish trend.

Technical indicators and market trends suggest PEPE might face further declines, yet potential key levels could spark a reversal.

Pepe Struggles Amid Persistent Bearish Pressure

Throughout the week, PEPE has experienced significant downward pressure. Despite some positive fundamental indicators, technical analysis points to more potential declines. The overall crypto market has dropped by 2.1%, and even though there have been positive netflows into Bitcoin ETFs, Bitcoin itself is down by 0.9%. PEPE’s high correlation with Ethereum, which recently saw significant outflows and a price drop of 2.9%, appears to be adding to its downward momentum.

Exchange Dynamics and Their Impact on PEPE

PEPE’s decreasing on-exchange reserves, which fell by 1.44 trillion tokens valued at $10.89 million on August 15th, typically signals positive long-term sentiment as investors move their holdings off exchanges. However, this reduction has coincided with a 4% drop in PEPE’s price to $0.00000751. Analysts suggest that investors might be moving their tokens to other decentralized platforms for arbitrage opportunities. Concurrently, data from Coinglass highlights dropping Open Interest (OI) and Cumulative Volume Delta (CVD) for PEPE, indicating traders closing their long positions, potentially leading to more price declines given the negative funding rate.

Adoption Trends Offer a Glimmer of Hope

Despite the bearish price action, PEPE’s adoption rate remains impressive. CoinCarp reports an average of about 430 new holders daily over the past month. Few cryptocurrencies outside the major coins like Bitcoin, Ethereum, and Solana show such consistent growth. This adoption metric could be a bullish indicator, suggesting underlying confidence in the asset’s potential.

Technical Analysis: Key Levels and Future Projections

PEPE’s recent breakdown from a symmetrical triangle pattern has reinforced its bearish outlook. The coin is expected to find support around $0.00000680–$0.00000700, which aligns with its previous lows. Should it successfully bounce from these levels, a double-bottom bullish reversal pattern could emerge, potentially driving the price up by over 105% to $0.00001280. Indicators like the Bollinger Bands and Chaikin Money Flow (CMF) suggest that PEPE remains in an oversold condition, supporting the case for further declines unless a significant uptick in buying interest materializes.

Conclusion

In summary, while the current technical indicators for PEPE point towards further downside, significant support levels and increasing adoption suggest there could be a potential for a future reversal. Investors should closely watch the $0.00000650 support zone for signs of a bounce that could rally the price upward. Continued monitoring of market conditions, trader sentiment, and adoption rates will be crucial for anticipating PEPE’s next moves.