Pepe, the third-largest meme cryptocurrency, has been in a downward spiral since December, but two chart formations suggest a significant recovery might be forthcoming.
Pepe (PEPE) soared to an all-time high of $0.00002833 in December, only to plummet over 80% this month. This decline has echoed the trends seen among other meme coins, which have also experienced substantial dips from their 2024 peaks.
Pepe’s price reveals a falling wedge and a double bottom
Technical indicators imply that Pepe could be nearing a notable bullish breakout in the days or weeks ahead.
Analysis of the daily chart shows that a falling wedge has formed, a well-known reversal pattern. This pattern is characterized by two descending and converging trendlines; the upper line connects the peaks since December, while the lower line links the troughs since last November.
Additionally, Pepe’s price has established a significant double-bottom pattern at $0.0000060. This double bottom features two troughs and a neckline at $0.00002830, which marks its previous peak. This neckline also aligns with a compelling pivot point according to the Murrey Math Lines tool.
The Relative Strength Index has been steadily increasing and has just breached the downward trendline connecting the highest peaks since January—indicative of a completed bullish crossover pattern.
As a result, the price of Pepe is likely to experience a strong bullish breakout, targeting approximately $0.00002095, which is about 220% above its current level and corresponds to the highest swing on January 19.
Conversely, a drop below the critical support at $0.000002980, a weak stop and reverse point using the Murrey Math Lines, would negate the bullish outlook.
Possible catalysts for Pepe coin
Several factors might propel Pepe higher in the upcoming weeks. Firstly, recent US consumer inflation data has been positively received, revealing that the headline Consumer Price Index has decreased from 3% to 2.8%. Core inflation, which excludes the fluctuating food and energy prices, has dropped from 3.3% to 3.2%.
Secondly, Pepe’s futures open interest has increased recently, reaching $198 million on Wednesday—its highest point since March 7. Although this remains significantly lower than the year-to-date peak of $556 million, historical patterns indicate that substantial price surges often follow periods of low open interest.
Lastly, astrology analysts believe that the current crypto downturn might conclude this week coinciding with the lunar eclipse.