Pepe [PEPE] was down 0.66% in 24 hours at the time of writing, following sharp short-term volatility that drove prices down 2.33% in an hour to sweep the weekend lows at $0.00000588.
The popular memecoin had an excellent start to the new year. From the 1st of January to the 4th of January, it rallied 80.15%, but has faced a retracement of 18.32% since then.
AMBCrypto reported that the memecoin sector as a whole had a strong bullish momentum in the first week of the year. Capital rushed back in, and top memecoins stole the spotlight. This momentum has slowed since the 5th of January.
PEPE was down 15.27% over the past week, Dogecoin [DOGE] has shed 7.25%, while Bitcoin [BTC] moved sideways in a consolidation around the $90k psychological level and was down just 1.02% in a week.
PEPE bulls were unable to flip the November supply zone
Source: PEPE/USDT on TradingView
In late October/early November, the $0.0000062-$0.0000072 area had been a local resistance zone. The rally on Sunday, the 4th of June, took PEPE above this supply zone, but the buyers were unable to defend their gains.
Since then, the memecoin has slipped back below this key short-term support zone. The $0.0000062 level is now a resistance, and bulls will need to work hard to bring it under their control.
The market structure on the 1-day timeframe was bullish. The A/D indicator reflected strong buying pressure in early January, and the Awesome Oscillator showed that bullish momentum was still prevalent.
Gauging the less likely short-term scenario
Given the surge in capital flow at the start of January, a retracement back below the $0.0000044-$0.00000050 demand zone appeared unlikely. Bitcoin has also climbed back above $91k and is challenging the $92.5k local resistance.
A breakout past $92.5k and $94.5k would bode well for the memecoin sector.
Traders’ call to action- Wait for confirmation
Source: PEPE/USDT on TradingView
While the 1-day structure was bullish, the 1-hour structure remained bearish. The $0.0000060 area was a local supply zone, and there were multiple local supply zones overhead that were marked by swing highs on this timeframe.
Traders can wait for a retracement to $0.0000044-$0.0000050 to buy, or use a breakout above $0.0000072 to buy into strength. For now, patience was necessary for lower timeframe traders.
Final Thoughts
- The memecoin sector’s bullish strength has halted over the past week, and PEPE was down 15%.
- Bulls can wait for a deeper retracement to buy, targeting a breakout to $0.0000080-$0.0000095.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
