Why Pepe Coin Faces a High Risk of Further Decline: Key Factors Behind Its Bearish Outlook
Pepe Coin (PEPE) is currently under significant bearish pressure, with its price plummeting nearly 76% from its November peak. The recent decline, driven by both weak technical indicators and deteriorating market fundamentals, suggests the meme coin may face an even deeper correction in the near future.
In the past few weeks, PEPE has dropped sharply from a high of $0.00001667 in May to around $0.0000067. This plunge has brought the token below crucial support levels, including the $0.0000091 mark, which formed the lower boundary of a descending triangle—a pattern that often precedes further declines. The coin has also sunk beneath both its 50-day and 200-day moving averages, reinforcing the bearish trend. Notably, a death cross—a technical formation where the 50-day MA crosses below the 200-day MA—was confirmed on August 27, adding to the negative outlook.
Another technical red flag is the formation of a head-and-shoulders pattern, a classic bearish reversal signal. The head of this formation peaked at $0.00002840, while the shoulders were around $0.00001692. The neckline, which acts as the critical support level, lies at $0.0000057. A decisive break below this neckline would likely trigger another wave of selling pressure, with potential downside targets near $0.000002793, which represents this month’s lowest level.
Any chance for a short-term bullish reversal would require PEPE to regain and sustain levels above $0.00000911. However, given current market dynamics, such a move appears unlikely without a significant shift in sentiment or a sudden influx of buying activity.
Beyond technical indicators, the coin’s fundamentals paint an equally grim picture. On-chain analytics reveal that large holders—commonly referred to as “whales”—have been actively reducing their exposure to PEPE. Over the past month, whale holdings have dropped by 20%, declining from over 6.13 trillion tokens in September to just 4.89 trillion. This mass exodus by influential investors reflects a lack of confidence in the token’s future price performance.
Similarly, public figure investors—often seen as trendsetters within the crypto community—have started liquidating their PEPE positions. Their holdings have fallen from 100.8 billion in September to just 91.94 billion, with a noticeable weekly decline. These moves suggest institutional and well-informed investors are anticipating further downside.
The exodus isn’t limited to whales and influencers. So-called “smart money” investors, known for making highly calculated moves, have also slashed their PEPE holdings by 38% in just 30 days. This broad-based selling across different investor classes indicates a loss of faith in the coin’s short-term prospects.
Market data further supports this bearish sentiment. According to recent figures, PEPE’s weighted funding rate has remained negative, a sign that short positions in futures markets are outweighing longs. At the same time, futures open interest has collapsed to $250 million—down substantially from its July peak of $1.02 billion. This sharp decrease reflects dwindling trader interest and reduced speculative activity.
Moreover, PEPE’s daily trading volume has plummeted from its year-to-date high of $5 billion to under $600 million. The significant drop in liquidity is another indicator of waning investor appetite, making the token more vulnerable to volatile price swings and steep sell-offs.
Adding to the downward pressure is the broader decline in the meme coin sector. With less retail hype and reduced speculative inflows, most meme tokens, including PEPE, have lost their initial momentum. Unlike utility-based cryptocurrencies, meme coins rely heavily on social media trends and viral marketing, which can be short-lived and extremely volatile.
Another factor hurting PEPE’s price is the lack of any major development or utility enhancement. While some meme coins attempt to evolve by integrating with decentralized finance (DeFi) platforms or launching NFT marketplaces, PEPE has yet to announce any significant ecosystem upgrades. This stagnation makes it harder to maintain investor interest, especially during broader market corrections.
The macroeconomic environment is also playing a role. With rising regulatory scrutiny, tightening monetary policies, and geopolitical uncertainties, riskier assets like meme coins are often the first to see capital outflows. Investors are increasingly reallocating funds to more stable and fundamentally strong assets such as Bitcoin and Ethereum, leaving tokens like PEPE exposed.
Furthermore, the sentiment surrounding the crypto market as a whole is shifting toward caution. While some leading cryptocurrencies are showing signs of consolidation, speculative assets are facing reduced inflows. Without sustained demand, PEPE may continue its downward trajectory, especially if it breaks below the critical neckline support.
In conclusion, PEPE appears to be caught in a strong bearish cycle, fueled by technical breakdowns, large-scale investor exits, and weakening market interest. Unless there is a significant turnaround in fundamentals or renewed retail interest, the path of least resistance remains downward. Investors should tread carefully and monitor key support levels closely, as a break below these thresholds could accelerate the decline even further.
For now, caution is warranted. With the market showing clear signs of fatigue and investor confidence fading, PEPE may struggle to find a firm bottom in the near future.