Bitcoin Boosts Memecoin Market

Bitcoin Boosts Memecoin Market

The recent surge in the cryptocurrency market, led by Bitcoin, has sparked notable progress in memecoin projects. On May 27, Pepe (PEPE) reached an all-time high in price, largely attributed to the approval of Ethereum exchange-traded fund (ETF) applications in the US. This approval has fostered investor perception of Ethereum-based memecoin projects as high-risk yet potentially high-reward ventures.

PEPE's Record-Setting Performance

PEPE's price soared by 7.60%, reaching an unprecedented $0.00001725. This follows an 88% increase since the US Securities and Exchange Commission (SEC) approved Ethereum ETF applications on May 20. Similar trends were witnessed in other Ethereum-standard memecoins such as Dogecoin, Shiba Inu, and Mog Coin (MOG), which also experienced significant price gains post-ETF approval.

However, the current upward trajectory of PEPE may face challenges in the near term. The widening gap between rising prices and a declining daily relative strength index (RSI) suggests potential market exhaustion.

What is Happening on the PEPE Front?

PEPE's waning bullish momentum indicates a potential price reversal, mirroring a similar 40% decline in memecoin projects earlier this year when rising prices diverged from falling RSI trends. The daily RSI for PEPE has already exceeded 70, entering the overbought zone, which often precedes a market correction or consolidation phase. This raises the possibility of a sell-off following its strong performance.

Should a market correction occur, PEPE's price could potentially drop to around $0.00000965 by June, marking a 40% decrease. Conversely, if the uptrend continues, PEPE could test the 2.618 Fibonacci retracement level near $0.00002203, indicating a potential 32% rise from current levels in the coming weeks.

Key Insights for Investors

• Monitor RSI levels closely as they provide crucial overbought or oversold signals.
• Be cognizant of large token holders' actions, as their sell-offs can influence market trends.
• Consider the impact of ETF approvals on Ethereum-based projects.
• Assess the risk of potential price corrections following significant rallies.

PEPE's bearish technical outlook is further supported by profit-taking behaviors among its largest investors. During the market uptrend, entities holding over 1 billion tokens have reduced their PEPE supply, suggesting that whales are selling at local price peaks. Consequently, the supply held by smaller investors is increasing.

The post first appeared on BH NEWS: Bitcoin Boosts Memecoin Market