As Bitcoin’s price maintains its upward momentum in recent days, the altcoin market is experiencing a surge in trading volume. Alongside this, meme coins are showing signs of recovery from their earlier lows, with Pepe coin notably recording significant gains in the past few hours. Despite this uptick in Pepe’s value, there’s growing concern about the potential for a long squeeze due to a lack of on-chain support.
Loss-Making Addresses Might Bring Correction
Data from Coinglass reveals that a massive short liquidation exceeding $300K occurred in the Pepe market following a sharp price increase from $0.00000125 to $0.0000016 in recent hours. This price jump appears to be prompting investors to leave the market with profits, as suggested by recent on-chain activity.
According to IntoTheBlock, the number of Pepe’s loss-making addresses has significantly increased, recently reaching 70,000, which represents about 42% of all holders. Conversely, the number of profitable addresses has decreased to 47% or 77,000 addresses, indicating a trend where new holders are more frequently experiencing losses.
There is a possibility that these loss-making addresses could become profitable if Pepe’s value were to surge more. This potential increase might prompt these holders to sell their holdings, aiming to minimize their losses or secure a small profit. Such a move could lead to a downward correction in the market.
It’s important to note that a correction in Pepe’s value, especially during an overall upward momentum like now, could lead to a long squeeze. In such a scenario, holders of long positions may panic and sell their holdings, potentially causing a significant drop in value below the immediate support levels.
Over the last few hours, the long/short ratio for Pepe has declined below 1, suggesting that short-positions are dominating. Currently, the market is going for a correction as 57% short positions are creating selling pressure.
What’s Next For Pepe Price?
The bulls are preventing Pepe’s value from staying below the 20-day Exponential Moving Average (EMA) of $0.000001337, showing strong purchasing at lower prices. The 20-day EMA is now surging, and the Relative Strength Index (RSI) is close to the overbought region, hinting at a possible downward movement soon. Currently, the Pepe price is facing a downward correction near the high of $0.0000016. As of writing, Pepe price trades at 0.0000015, surging over 18.4% from yesterday’s rate.
For bulls to take the lead, they need to drive the price above $0.0000016. This could initiate a new upward trend towards $0.000002. However, bears are trying to halt the bullish trend as the price now takes a negative turn.
A drop below the EMA20 trend line will strengthen bearish positions and trigger a wave of selling pressure. In such a situation, Pepe price will test buyers’ patience at $0.000001-$0.0000012.
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