3 Reasons Why PEPE’s 84% Price Rally Could Reverse as Quickly
Despite a recent 84% rally, PEPE's price surge may reverse due to bearish on-chain activity, crowded derivatives, and a potentially fragile chart pattern.Summary
Although PEPE has seen a significant 84% price rally from its late December low, several indicators suggest this move is fragile. The first reason for caution is that while the 12-hour chart shows a bullish bull flag pattern and positive EMA crossover signals, this structure is only valid if the price remains above the critical support level of approximately $0.0000060.
The second concern stems from on-chain data: large holders (whales) have been steadily selling, distributing nearly 2.86 trillion PEPE since late December. Furthermore, the spent coins metric spiked during the rally, indicating distribution and profit-taking rather than accumulation, which weakens the rally's foundation.
The third factor relates to the derivatives market, where long positions are heavily crowded, with long liquidation leverage nearly double that of short leverage ($218M vs $106M). This suggests the rally was partly fueled by short liquidations. This overcrowded long exposure now poses a downside risk, as a modest pullback could trigger cascading long liquidations, potentially causing a sharp drop toward $0.0000046 if the $0.0000060 support fails.
(Source：BeInCrypto)