Potential Further Decline for PEPE Memecoin
The PEPE memecoin, inspired by the popular frog image, has been trading within a descending wedge pattern since May 27. Since then, its value has fallen by 52%, currently hovering around $0.0000077.
Descending Wedge Formation
A descending wedge is a pattern where an asset's price moves between two converging downward trend lines. Usually, this formation is considered bullish, indicating a potential upward breakout. However, for PEPE, a bearish outcome may be more likely.
Bullish Formation Invalidated
Since August 25, PEPE's price has dropped significantly, nearing the lower trend line of the wedge. If the asset falls below this support level, it could invalidate the bullish potential associated with this formation, signaling a continuation of the downtrend.
Technical Indicators
PEPE's technical analysis supports this possibility. It has fallen below both its 20-day EMA and 50-day SMA, two important moving averages. Additionally, its RSI is below its neutral line, indicating low buying pressure.
Negative Sentiment
The negative weighted sentiment surrounding PEPE further reinforces the bearish outlook. A value below zero suggests that online conversations about the asset are predominantly negative, typically associated with a decline in value.
Potential Price Movements
If PEPE fails to defend the lower wedge line, it could drop to its August 5 low of $0.0000059, representing a 28% decline. Conversely, if the trend reverses, it could potentially rise to $0.0000086.