PEPE's 84% Price Rally Faces Mixed Signals as Whale Selling and Derivatives Imbalances Emerge

Pepe (PEPE) has experienced a significant 84% price increase, fueled by retail and institutional interest, but whale selling and derivatives imbalances raise sustainability concerns according to Yahoo Finance. The token's price action on 12-hour charts shows a bull flag pattern, while on-chain activity and whale behavior indicate distribution and profit-taking as reported. Derivatives data reveals $218 million in long liquidation leverage versus only $106 million in short exposure, highlighting risks of cascading losses if the price dips below key support levels according to data.

Pepe (PEPE) has surged nearly 84% in recent trading sessions, driven by a combination of speculative demand and renewed interest in meme coins. This rally has drawn attention to the token's short-term momentum, with technical indicators suggesting a potential trend continuation. However, on-chain metrics and derivatives data indicate growing uncertainty about the sustainability of this movement. Whale selling has accelerated, with large holders reducing their holdings by nearly 2.86 trillion tokens—equivalent to $20 million in value—since late December.

The rally has also pushed PEPE toward key resistance levels, with bulls defending support at $0.00000526 as a critical threshold. If buyers manage to hold this level, the token could test new highs of $0.00000800–$0.00001. Conversely, a breakdown could trigger a sharp retracement toward $0.00000485 by mid-2026.

On the technical front, the 100-day EMA at $0.00000598 serves as a key price level to monitor. A decisive close below this threshold could signal a return to bearish momentum, with further declines potentially reaching $0.00000519 according to Bitget analysis. The broader memecoin market has also shown signs of cooling, with PEPE experiencing a five-day price decline following a 72% weekly surge.

What Drives PEPE's Price Action Now?

PEPE's price movements remain highly sensitive to whale distributions and derivatives trading activity. Whale selling has increased significantly, with large holders liquidating their positions during the recent rally. This behavior suggests that the price surge may reflect profit-taking and short-term speculative activity rather than long-term accumulation. Additionally, derivatives market data reveals an imbalanced exposure, with $218 million in long liquidation leverage versus only $106 million in short exposure. This imbalance could lead to cascading losses if the price pulls back below key levels.

The broader market context also influences PEPE's trajectory. Meme coins have added nearly $8 billion in value since the beginning of the year, driven by retail participation and whale activity. However, signs of profit-taking and elevated short liquidation levels point to a possible cooldown in the coming weeks. If this trend continues, PEPE may struggle to maintain its current momentum.

What Are the Key Risks and Limitations for PEPE?

Despite the recent rally, PEPE faces structural limitations that could hinder its long-term growth. The token has a circulating supply of approximately 420 trillion tokens, making it highly unlikely to reach $0.0001 without a market capitalization exceeding $4.2 trillion—a threshold that surpasses the current total cryptocurrency market cap according to AInvest analysis. Analysts project more modest price targets between $0.000005 and $0.000075 by 2030, depending on market conditions and community engagement as forecasted.

Additionally, PEPE's price is heavily influenced by social media trends and community sentiment rather than technological innovation according to Phemex. This dynamic creates a high degree of volatility, with price movements often driven by speculative hype rather than fundamental value creation. As a result, investors should be cautious about treating PEPE as a long-term investment and consider its speculative nature when making trading decisions according to AInvest.

The token's reliance on a small number of large holders further exacerbates these risks. Concentrated ownership patterns can lead to unpredictable price swings and reduce the token's overall stability. For example, a single whale opening a 3x leveraged position with over $2 million in unrealized gains reflects growing institutional and experienced trader confidence in the short-term price movement of PEPE. However, this also highlights the potential for sharp corrections if the market sentiment shifts as Chain analysis shows.