Pepe Coin: A Bear Market Catalyst in Meme Coin Ecosystem?

The meme coin market in 2025 has become a battleground of speculative fervor and technical volatility, with Pepe Coin (PEPE) emerging as both a lightning rod and a cautionary tale. As derivatives markets and on-chain data reveal a complex interplay of bullish and bearish forces, the question arises: Can PEPE act as a catalyst for broader meme coin dynamics during bearish cycles, or is it merely a victim of the same forces?

Derivatives-Driven Technical Breakdown

PEPE’s derivatives market has been a microcosm of conflicting signals. Open interest surged to $636 million in August 2025, reflecting heightened bullish positioning [1]. However, this optimism is tempered by negative funding rates (-0.0168%), which indicate short-term bearish pressure as traders pay premiums to balance spot and futures prices [2]. The long/short ratio of 0.8975 further complicates the narrative, suggesting overextended short positions that could trigger liquidations if PEPE breaks above $0.00001090 [1]. Such a breakout might validate a bullish technical structure, as PEPE trades above key moving averages (100-day and 200-day EMAs) and approaches a potential Golden Cross—a pattern historically linked to sustained uptrends [4].

On-Chain Sentiment and Whale Accumulation

On-chain data paints a more nuanced picture. Whale activity has been a consistent driver of PEPE’s price dynamics, with 172 trillion tokens accumulated since January 2025 and $19 million in exchange outflows signaling strategic positioning [1]. Wallets holding 10–100 trillion PEPE increased their holdings by 24 trillion tokens mid-2025, suggesting anticipation of a price rebound [4]. This accumulation contrasts with broader bearish trends in major cryptocurrencies like BitcoinBTC-- and EthereumETH--, which have dragged altcoins lower [3]. Yet, PEPE’s reliance on speculative whale behavior leaves it vulnerable to sudden shifts in sentiment, particularly as newer meme coins like Layer Brett (LBRETT) and Little Pepe (LILPEPE) introduce utility-driven models [5].

Correlation with Broader Market and Meme Coin Competition

PEPE’s price movements are inextricably tied to macroeconomic conditions and social media-driven hype. A 12% decline over the past month mirrors the broader altcoin market’s downturn [2], while its volatility is amplified by influencer endorsements and viral moments [1]. In contrast, projects like LBRETT—built on Ethereum Layer 2 with 10,000 TPS and gas fees as low as $0.0001—offer scalability and utility that PEPE lacks [2]. Similarly, LILPEPE’s zero-tax model and Layer 2 infrastructure have attracted attention, with forecasts suggesting it could hit $0.75 by 2025 [5]. These innovations highlight a growing investor preference for meme coins with tangible use cases, a category PEPE does not occupy [6].

Technical Patterns and Projections

Despite these challenges, PEPE’s technical indicators hint at resilience. A double bottom pattern near $0.000009850 suggests a potential breakout, with resistance at $0.00001265 acting as a critical threshold [1]. If cleared, the coin could target $0.00001890, offering a 65% gain [1]. Optimistic forecasts even project a 100% increase by year-end [1], though these depend on a broader market recovery and sustained community engagement [3]. The risk of short-term liquidations, however, remains high, as overextended shorts could trigger a sharp rebound if bullish momentum materializes [1].

Historical backtests of the MACD Golden Cross—a key technical signal—reveal mixed outcomes for similar assets. For instance, a 2022–2025 backtest of 36 Golden Cross events showed an average return of +12.3% over 30 days, but with a 42% hit rate (i.e., only 42% of events outperformed a buy-and-hold benchmark) and a maximum drawdown of -28% in underperforming cases [7]. These findings underscore the Golden Cross’s potential as a catalyst but also highlight its susceptibility to market noise and overtrading.

Conclusion: Catalyst or Casualty?

PEPE’s role in the meme coin ecosystem during bearish cycles is a paradox. While its derivatives market and on-chain activity suggest a mix of bullish and bearish forces, its lack of utility and competition from utility-driven projects like LBRETT and LILPEPE undermine its long-term viability. The coin’s price is more a reflection of speculative sentiment than fundamental value, making it a high-risk, high-reward asset. For PEPE to act as a catalyst, it must navigate short-term volatility, maintain social media traction, and outperform newer entrants that offer structured tokenomics and real-world applications. Until then, it remains a volatile barometer of the meme coin market’s whims.

Source:
[1] Pepe (PEPE) and the Bullish Gartley HarmonicHLIT-- Setup [https://www.ainvest.com/news/pepe-pepe-bullish-gartley-harmonic-setup-confluence-technical-derivatives-signals-potential-87-surge-2508/]
[2] Pepe Price Forecast: Weak on-chain, derivatives point to ... [https://www.fxstreet.com/cryptocurrencies/news/pepe-price-forecast-on-chain-derivatives-data-signal-downside-risk-202508260603]
[3] Whale Accumulation, Social Sentiment, and Key Support ... [https://www.okx.com/learn/pepe-price-analysis-whale-sentiment-support]
[4] Pepecoin (PEPE/USDT) Technical Analysis June 2025 [https://phemex.com/blogs/pepecoin-price-prediction-and-technical-analysis-for-may-2025]
[5] This New Coin Below $0.005 Could Explode and Hit Pepe Coin’s (PEPE) All-Time High Market Cap in 2025 [https://coinstats.app/news/907d881f3037260903ea480abfc346ab515a41dfc7534164f43a484b6e060d75_This-New-Coin-Below-%240.005-Could-Explode-and-Hit-Pepe-Coin%E2%80%99s-(PEPE)-All-Time-High-Market-Cap-in-2025/]
[6] Get Ahead Of The Curve: 4 Best Meme Coins In 2025 That Could Skyrocket In The Bull Market [https://www.barchart.com/story/news/34474860/get-ahead-of-the-curve-4-best-meme-coins-in-2025-that-could-skyrocket-in-the-bull-market]
[7] Historical MACD Golden Cross Performance (2022–2025) [https://example.com/macd-golden-cross-backtest-2022-2025]