Pepe Price News: PEPE Could Fall 25% as Bullish Structure Falters

PEPE has emerged as the top-performing meme coin of the top 5 with monthly gains of nearly 60% as traders’ interest in this particular token has increased lately for some reason.

As a result, Pepe has distanced itself significantly from Official Trump (TRUMP) as the latter has been unable to recover to the levels seen during its launch in January this year.

Open interest in PEPE futures has surged to new records in May as the entire category has recovered strongly.

However, this token seems to be a favorite for speculators. Data from CoinGlass shows that $695 million worth of PEPE contracts were negotiated on May 22. This is the highest volume of this kind of product that has been transacted in a year.

High OI typically favors more volatile movements in the price of an asset. In the case of PEPE, this kind of historical record in speculative volumes tends to point to an overleveraged market.

Hence, PEPE risks a strong downward movement once the uptrend loses steam as part of a normal market cycle.

PEPE Encounters Strong Resistance at $0.00001700

Looking at the daily chart, PEPE experienced significant selling pressure after it neared the $0.00001700. The token has now recovered to its January 2025 levels and has trimmed its year-to-date (YTD) losses to around 28%.

PEPE made a higher high in the past few days but this jump was met with strong selling volumes that pushed the token below its second-best higher high, meaning that its bullish structure has been broken.

This increases the risk of a sharp downturn at a point when positive momentum seems to be decelerating. The Relative Strength Index (RSI) has been declining for days and has dropped below its 14-day moving average.

This higher high occurred in the context of a bearish divergence in the RSI, meaning that bullish momentum could be losing steam. Hence, we could be nearing the exhaustion phase of the rally.

For now, a bearish outlook has not been confirmed but technical and price action indicators are now leaning toward a downward movement.

PEPE Risks Drops to $0.00001270

Looking at a lower time frame, the price has broken its bullish structure already in the hourly time frame. The $0.00001450 level is now the key resistance to watch and a plausible area for a retest that could confirm a bullish outlook for PEPE.

Momentum indicators are also favoring a bearish outlook as the Relative Strength Index (RSI) has dropped below the signal line and has dropped below 50.

The first bearish target for PEPE could be set at 0.00001360. This offers a 1.7 risk-reward ratio to traders if this structure break is confirmed.

Meanwhile, a second target could be set at $0.00001270. This implies a much higher RR ratio but it would take longer for the trade to unfold and traders should keep an eye on how the price reacts after it gets to the first target as market sentiment is still bullish and buyers could be looking for a lower entry to keep pushing PEPE higher.