🌎 Pepe Token Surges 38% Amid Market Downturn, Faces Key Risks

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The price of Pepe token has increased for two consecutive days in a high-volume environment as traders bought the dip.

Pepe Price Recovery

Pepe, the third-biggest meme coin, was trading at $0.0000081 on Wednesday, up by over 38% from its lowest point on Monday. This rise occurred when stocks and most cryptocurrencies tumbled by double digits. Its price action has mirrored that of other tokens like Stacks (STX), Bonk, and Solana, all of which have formed a hammer pattern, a popular reversal sign in the market.

Among all meme coins, Pepe had the highest volume, reaching over $1.43 billion. This is higher than Dogecoin’s $1.03 billion and Shiba Inu’s $356 million.

Key Risks in Pepe’s Recovery

Despite the recent recovery, Pepe faces several risks:

Low futures open interest: Pepe’s interest stood at just $71 million, down from July’s high of over $141 million.
Bearish chart patterns: The token has formed a head and shoulders pattern, dropping from the right shoulder level at $0.000013 and crossing the slanted neckline at $0.0000066.

These factors suggest that if the current recovery is brief, there is a risk that Pepe could drop to as low as $0.0000020, about 75% below its Wednesday levels. This level was determined by measuring the distance between the head and the neckline.

Pepe Token and Elliot Wave Phase

Pepe has likely invalidated the impulse Elliot Wave pattern by failing to complete the bullish fifth section. Another potential risk is the formation of a death cross pattern, a significant bearish sign.

Moving Averages and Trend Predictions

Pepe remains below the 50-day and 100-day Simple Moving Averages, which have recently formed a bearish crossover pattern. Therefore, the token is likely to resume its downward trend and possibly retest this week’s low of $0.0000058. A break below that level could indicate more downside.