LUCKNOW (CoinChapter.com)—Pepe coin price action has been underwhelming recently, struggling to find solid ground amidst a broader market downturn. Despite occasional spikes, the token’s value remains suppressed, indicating waning investor confidence.
Bearish on-chain signals accompany this decline, suggesting that PEPE’s short-term outlook may face additional downward pressure.
Bearish On-Chain Signals Undermine PEPE’s Recovery Prospects
PEPE’s recent market activity reveals a troubling picture. The increasing balance of PEPE on exchanges, a clear signal of potential selling pressure, is a primary concern.
The transfer of more tokens to exchanges intensifies the likelihood of a sell-off, creating significant headwinds for any price recovery. The trend underscores the bearish sentiment surrounding the token, as investors seem more inclined to offload their holdings than to accumulate.
Moreover, the Market Value to Realized Value (MVRV) ratio remains at a neutral level, offering little support for a bullish case. The MVRV ratio indicates that PEPE is not significantly undervalued, reducing the incentive for investors to buy in at current levels. Moreover, the absence of strong undervaluation diminishes the possibility of a sudden rebound.
Compounding the bearish outlook is the Network Realized Profit/Loss indicator, which has shown consistent realized losses in recent weeks. The frequent dips into negative territory suggest that traders are increasingly selling PEPE at a loss, a strong indicator of fading market confidence.
When combined with the rising exchange balances and neutral MVRV ratio, this persistent realization of losses paints a bearish picture for PEPE in the short term.
Technical Setup Forecasts More Bearish Signals
Meanwhile, the PEPE USD pair has formed a bearish technical setup called the ‘descending triangle.‘
Analysts recognize the descending triangle as a bearish continuation pattern. The configuration features a declining upper trendline that compresses price action into lower highs, while a flat lower trendline serves as consistent but weakening support.
The pattern signals intensifying selling pressure, resulting in progressively weaker rallies that struggle to breach resistance.
In this setup, traders estimate the potential downside by measuring the maximum height of the triangle. Pepe coin’s price recently broke out of this descending triangle, only for bulls to push it back within the pattern.
However, if the Pepe coin price confirms the bearish setup, the PEPE/USD pair could plummet by over 62%, reaching a target near $0.000003024.
A breakout below the pattern in the current market climate could be catastrophic for PEPE prices, potentially resulting in significant losses for the trading pair. Moreover, if the Pepe coin rally fails, the bulls will likely attempt to consolidate above the pattern’s support level to mount a defense.
