NOIDA (CoinChapter.com)— Pepe coin price started a monstrous recovery rally after the recent crypto market crash, painting the near-mythic V-shaped recovery.
However, bearish risks against the token remain despite the PEPE USD pair rocketing nearly 25% since Aug. 6 to reach a daily high near $0.00000876 on Aug. 8.
Price Still Far From Dropping A Zero
The memecoin is currently moving inside a bearish technical pattern called the ‘descending triangle.‘
Despite the recent crash, Pepe coin bulls managed to help the PEPE USD pair avoid a breakout below the pattern. The token has been recovering since then, with the rally helping PEPE price break above the 200-day EMA (green wave).
The relative strength index for PEPE remains comfortably neutral, with a score of 42.4 on the daily charts, which leaves plenty of room for Pepe coin’s bullrun. If the memecoin starts a rally, the exchange rate for 1 PEPE against the US dollar could reach $0.0000094.
Flipping the immediate resistance would help PEPE price rise to the resistance near $0.000011 before correcting.
On the other hand, failure to start a rally might result in Pepe coin price dropping to the support levels near $0.00000722 and $0.00000614.
Bearish Sentiment Could Hurt Pepe Coin Prices
In the past two weeks, PEPE’s open interest has significantly declined, dropping from around $133 million to approximately $60 million on August 8. The sharp decrease highlights a notable reduction in trader participation and confidence.
When open interest falls, it typically signals that traders are closing their positions, either due to profit-taking or a lack of confidence in future price movements.
Simultaneously, the funding rate has been rising. A positive and increasing funding rate suggests that traders with long positions are willing to pay those with short positions, indicating a bullish sentiment among the remaining market participants.
The rise in the funding rate points to a scenario where traders expect the price to increase even though fewer traders are actively participating.
The combination of these two factors creates a complex picture for the memecoin. The dwindling open interest reflects a reduction in market engagement. However, the rising funding rate indicates that the traders who remain are increasingly bullish, anticipating a price rebound.
Another bearish cue could be the profit booking from those who bought near the lows of Aug. 5, which puts such cohorts profitable by nearly 142%. These traders could dump their tokens to book profits, which could half the token’s rally.
