PEPE surges 25% in a day – Should traders take profits or buy more?

A week ago, AMBCrypto reported that the popular memecoin Pepe [PEPE] was trading within a compressive chart pattern. The descending wedge formation had been in play since August and was due for a bullish move as buyers absorbed the selling pressure.

The positive spot CVD back then was a warning to the bears, and PEPE rallied 25% in a day, at press time, giving January a good start. This rally successfully forced a bullish structure break on the 1-day timeframe.

AMBCrypto warned of a bearish divergence, which did not see a minor price dip to the $0.0000046 demand zone. The memecoin sector has outperformed the crypto market in the short term, and the sector’s market cap was up 8.87% in 24 hours.

Can PEPE continue this bullish run, and what are the next targets?

Swing traders have reason to go long

Source: PEPE/USDT on TradingView

Saying traders have reason to go long, then posting a weekly chart of a coin still held in a bearish grip seems puzzling at first. To clarify, the 1-day and lower timeframes saw a bullish structure shift.

On the other hand, the weekly chart was not encouraging, with prices below the 20 and 50-week moving averages, MFI showing bears in control, and the OBV struggling to clear the local highs.

The downtrend halted at the $0.000004 support zone for six weeks at the end of 2025, before seeing a bounce. This bounce has the potential to reach the next resistance levels at $0.00000747 and $0.00000950.

Respectively, such a bounce would measure 24.9% and 58.4%.

Assessing the chance of a failed breakout

Source: PEPE/USDT on TradingView

The bullish structure shift and the ease with which PEPE leapt past the $0.0000044-$0.0000049 supply zone were bullish developments. Given the momentum and increased buying activity, a bearish reversal after a 20% move appeared unlikely.

A sustained Bitcoin [BTC] move toward $94.5k, and higher, would increase the chances of a Pepe rally.

Traders, FOMO is not needed!

Source: PEPE/USDT on TradingView

The nature of memecoin rallies is a swift, explosive pump that sees very little retracement. It could be rewarding to go long now and stay long, but this was a high-risk, high-reward approach.

To lower the risk assumed, a retracement to the imbalances at $0.0000054 or $0.0000046 can be awaited. Traders should be warned that there is a chance the rally will continue without a price dip.

Yet, such a retracement would give traders a better risk-to-reward trade entry.

Final Thoughts

• Pepe has the potential to rally further, but it is unclear if we will see a minor price dip or not.
• Traders already in long positions can consider taking profits after the memecoin tests the resistance levels plotted on the weekly timeframe.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion