Pepe Coin’s price joined other cryptocurrencies in a steep downward trend as the market embraced a risk-off sentiment.
Pepe (PEPE), the third-largest meme coin, dropped to $0.0000156, its lowest level since Dec. 20.
The decline coincided with an ongoing surge in bond yields and a drop in American equities and cryptocurrencies. The Dow Jones index fell by 700 points, while the Nasdaq 100 and the S&P 500 dropped by 245 and 35 points, respectively.
Bitcoin (BTC) fell to $90,000, while the crypto fear and greed index moved to a neutral reading of 47. The total market capitalization of all cryptocurrencies dropped by 4% to $3.19 trillion.
The ongoing crypto crash is driven by rising fears that the Federal Reserve will maintain a hawkish tone as the U.S. economy continues to perform well and the unemployment rate falls. Data released on Friday showed that the U.S. unemployment rate dropped to 4.1% in December, with the economy adding over 256,000 jobs. These figures have raised concerns that the Fed will keep interest rates higher for longer.
The next key catalyst for Pepe and other cryptocurrencies will be the Consumer Price Index report scheduled for release on Wednesday. Economists expect the data to show that headline inflation rose from 2.7% in November to 2.9% in December.
If these estimates are accurate, it could signal that the Federal Reserve will remain hawkish. Officials have indicated they are focused on controlling inflation rather than the labor market. Additionally, some of Donald Trump’s proposed policies, including deportations and tariffs, are expected to drive prices higher.
On a positive note, Pepe Coin’s futures open interest has remained steady over the past few days. Open interest rose to $438 million on Jan. 13 and has stayed at that level. Higher open interest is often seen as a positive sign for a cryptocurrency, as it indicates ongoing interest from traders.
Pepe coin price forms a risky pattern
The daily chart shows that Pepe token peaked at $0.00002845 on Dec. 9 and has since dropped below its 50-day and 100-day moving averages — a sign that bears are gaining control.
Additionally, Pepe has formed a head-and-shoulders pattern, a popular reversal indicator. The Relative Strength Index and the Percentage Price Oscillator have both formed bearish divergence patterns.
A break below the 50% Fibonacci retracement level at $0.00001465 could signal further downside, potentially pushing the price toward the psychological support level of $0.000010.
