- Pepe’s bulls continued to defend the 78.6% retracement level.
- The lack of high buying volume meant that momentum was neutral and a strong rally was not yet in sight.
Pepe (PEPE) saw its on-chain indicators weaken but saw short-term gains over the past few days. Active addresses were down and trading volume was also not high, with whales also showing signs that they were inclined to move out of the way.
The price action chart showed that the Fibonacci retracement pivot level was still a support. As long as it remains standing, Pepe bulls remain hopeful.
Pepe’s volatility could hurt swing positions
Source: PEPE/USDT on TradingView
The Fibonacci levels drawn using the April-May rally are still relevant. The 78.6% retracement level continues to be respected as support, although some short-term deviations have been observed.
This meant that swing traders could enter long positions on a retest of this retracement.
Their stop-loss orders should take into account the short-term volatility around this level. Furthermore, neither momentum nor buying volume has been strong over the past month, suggesting that PEPE is in an accumulation phase.
A daily session close below the $0.000006 level would indicate that the bears are in control. In the meantime, buyers can buy more PEPE and wait for a recovery.
The OBV has been slowly moving higher since August, increasing the chances of a Pepe rally.
Will smart investors try to get people out of their positions?
Source: Hyblock
Prices are attracted to liquidity clusters, and AMBCrypto noticed such a pocket in the $0.000006 area. This also marked the lows to which the meme coin fell on August 5.
Traders and investors should therefore prepare for a rapid market decline.
Such a drop is not a guarantee but rather a probability at this point, since not all liquidity pools have been successfully tested.
Source: Coinalyze
Market sentiment appears to be bullish in the short term. After the gains made on September 13, Open Interest increased from $235 million to $273 million.
Is your portfolio green? Check out Pepe’s Profit Calculator
Speculators were eager to take long positions, seeking profits from the PEPE move and showing bullish sentiment. The slight decline in prices since then has not resulted in a significant decline in OI, meaning long positions continued to believe in further gains.
This could harm them in the coming days in the event of a sharp correction in Bitcoin (BTC).
Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and represents the opinion of the author only.
