Pepe Coin Price Bounces Back 30%. Is This a Dead Cat Bounce?

Pepe coin price has risen by 30% for three consecutive days. This rebound coincided with more upside of Bitcoin, which rose above $105,000 after the Federal Reserve interest rate decision. While some analysts expect that Pepe will keep rising, there is a risk that this may be a dead cat bounce.

Pepe Coin Price is Rising, But This May Be a Dead Cat Bounce

Pepe, the third-biggest meme coin, has bounced back after bottoming at $0.00001132 earlier this week. Still, the coin remains about 50% below its highest point in 2024.

There is also a risk that the ongoing recovery is part of a dead cat bounce (DCB). A DCB is when a falling asset stages a brief comeback and then resumes the downward trend. It is commonly known as bull trap and is common during a bear market. 

The risk that this is a dead cat bounce is also because the coin has formed a series of higher lows and lower lows. Therefore, a dead cat bounce will be invalidated if the Pepe coin price rises above the 50-day moving average and the upper side of the falling channel.

A break above these levels will point to more Pepe price gains, potentially to the all-time high of $0.00002830, about 100% above the current level. That bullish view is justified by the fact that the coin has formed what looks like a bullish flag pattern on the daily chart.

On the other hand, a drop below the key support at $0.00001132 will validate the view that the ongoing recovery is part of a dead cat bounce. It will also invalidate the bullish flag view and point to more downside to the support at $0.0000060, its lowest point in 2024. 

Analyst Sees Pepe Price Surging to $0.000032

A potential catalyst for the Pepe coin price is that some analysts are optimistic that it will jump soon. In an X post, one analyst cited the bullish flag pattern mentioned above. He predicted that it will soar to $0.000032, up by 125% from the current level. His view is that the token’s lowest level this week marked a bottom. 

Further, the value of Pepe and the futures open interest are diverging. The interest has remained steady, while the price has fallen, a potential bullish sign.

Another reason for a Pepe price forecast is that there are emerging signs that whales are accumulating the coin. Whale purchases are often bullish for a coin since these are highly sophisticated investors. 

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crispus

Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.