PEPE Memecoin Surges 8% Despite Bearish Indicators

PEPE, a popular memecoin, has seen a significant price increase, climbing nearly 8% to trade around $0.00001104. This surge has sparked interest across the crypto space, but not all analysts are convinced that the rally will last. Veteran trader Matthew Dixon has shared a warning, highlighting several red flags that suggest the current move might not be sustainable.

Dixon points out that the PEPE price is showing signs of a Head and Shoulders pattern, which is often seen as a bearish indicator. This pattern is characterized by a peak (the head) that is higher than the two surrounding peaks (the shoulders). The daily PEPE chart shows this pattern forming over the past several months, with the left shoulder appearing in late 2023, the head forming during a sharp rally in early 2025, and the right shoulder currently taking shape.

Additionally, PEPE's price continues to trade below a key descending trendline, which has capped each attempt to break higher. The neckline zone between $0.00001150 and $0.00001200 has been tested multiple times but not reclaimed. Unless PEPE can close above this area with volume, the neckline remains a major resistance level. A hidden bearish divergence on the RSI adds more pressure, as the RSI has been posting higher highs while price action has been horizontal or trending downward slightly. This divergence suggests that momentum is weakening even when the price is attempting to rally.

Dixon also mentioned that PEPE's recent moves resemble a corrective wave structure, which often appears during relief rallies and not during strong uptrends. This structure refers to the price movements that occur within a larger trend, often correcting the previous price movements. The analyst's concerns raise what he calls “a few immediate concerns” that could point to a short-term pullback.

For the bulls to flip the script, PEPE's price would need to break above the downtrend line, close above the neckline with strong volume, and show real strength by pushing the RSI past 65. Without these conditions, the setup still leans bearish. Until these conditions are met, technical pressure remains on the downside. PEPE’s closest support sits between $0.00000800 and $0.00000850. If the price drops below $0.00000900, there’s a good chance it could slide back into that range. And if $0.00000800 doesn’t hold, the next area to watch would be somewhere around $0.00000680 to $0.00000720.

Despite these bearish indicators, PEPE has continued to gain traction in the memecoin sector. The coin provides its investors with a no-tax policy, which has been a significant draw for many investors. The current price of PEPE is $0.00001104. The coin's rapid growth and market impact have made it a rising contender in the memecoin sector, with many investors hoping to capitalize on its potential for further price increases. However, Dixon's warning serves as a reminder that the cryptocurrency market is highly volatile and unpredictable. While PEPE's no-tax policy and meme hype have contributed to its popularity, investors should be cautious and conduct thorough research before making any investment decisions. The potential for a hidden trap in the coin's price movement highlights the importance of staying informed and vigilant in the ever-changing cryptocurrency landscape.