Pepe (PEPE) price breached the ascending trendline this past Sunday, marking a bearish breakdown. On-chain metrics show a decline in PEPE active addresses, signaling reduced network demand and potentially paving the way for a 20% price decline in the frog-themed meme coin.
Pepe price closes below the ascending trendline support on Sunday. The trendline is drawn from joining multiple swing low levels between mid-April and mid-June, as shown in the daily chart below.
If this trendline holds as a pullback resistance, it could crash 20% from the point of the breakout to $0.0000903. This is the 61.8% Fibonacci retracement level drawn from a swing low of $0.0000393 on April 13 to a swing high of $0.0000172 on May 27.
Supporting this bearish thesis are the Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart, as both indicators are below their respective mean levels of 50 and zero. This suggests the continued momentum favoring bears, potentially leading to a further decline in the frog-theme-based meme coin.
If the overall crypto market outlook is negative, PEPE could break below $0.0000903 and extend the decline by an additional 35% to retest its May 1 low of $0.0000592.
PEPE/USDT 1-day chart
On-chain data also points to a bearish outlook for PEPE price. According to IntoTheBlock's In/Out of the Money Map (IOMAP), approximately 3,040 addresses bought 24.60 trillion PEPE tokens at an average price of $0.0000110. If the price rises to this level, this significant amount of investors may opt to sell to get a breakeven on their positions.
From a technical analysis perspective, the $0.0000110 resistance level aligns with the IOMAP findings, marking this zone as a crucial reversal point to monitor.
PEPE IOMAP chart
Santiment’s Daily Active Addresses index, which helps track network activity over time, aligns with the bearish outlook noted from a technical perspective. The rise in the metric signals greater blockchain usage, while declining addresses point to lower demand for the network.
In PEPE’s case, Daily Active Addresses have fallen by 24% in the last seven days, extending a downtrend that originated at the end of May. This decline indicates that demand for PEPE’s network is waning, which could lead to a crash in frog-theme-based meme coin.
PEPE Daily Active Addresses chart
Conversely, if PEPE’s daily candlestick price closes above $0.0000125, the daily high from June 16, it would produce a higher high and signal a break in the market structure. This move would invalidate the aforementioned bearish thesis, potentially triggering a 22% rally to the previous resistance level of $0.0000152 from the daily high on June 6.