+25% in a day: Is PEPE finally preparing to escape its downtrend?
PEPE stunned the market with a 26.9% jump over the last 24 hours, accompanied by a massive 300% spike in daily trading volume. For a memecoin that has spent weeks stuck in a corrective phase, this late–week surge was a welcome change of pace. For bulls, the ideal scenario now would be a calm weekend without a sharp pullback, allowing price to consolidate higher and build a stronger base for continuation.
Whether that ideal scenario plays out is far from guaranteed. The volume expansion that fueled the latest rally did not emerge as a steady, multi‑day trend; it was tied almost exclusively to the most recent surge in price. That kind of “event‑driven” volume can signal short‑term speculation rather than the beginning of a sustained accumulation phase.
At the same time, broader market conditions are not yet fully supporting aggressive risk‑on behavior. Bitcoin is inching back toward the crucial $90,000 resistance zone – a level that recently rejected further upside. Without a convincing breakout from BTC above this ceiling, traders should be cautious about assuming that the entire altcoin sector, including PEPE, will receive strong and lasting tailwinds.
Testing the key supply zone on the daily chart
On the 1‑day timeframe, PEPE has pushed directly into a significant supply zone between $0.0000044 and $0.0000049. This region has previously acted as an area where sellers step in and absorb buying pressure. In the latest attempt, however, bulls managed to overcome this overhead supply and are now threatening to flip market structure to the upside.
The On-Balance Volume (OBV), which had been trending down for several weeks, is finally starting to grind higher. This slow upward drift indicates that buy volume is beginning to outpace sell volume, but the move is still far from explosive. As a result, it does not yet offer a decisive confirmation that a powerful new uptrend is underway.
The Relative Strength Index (RSI) on the daily chart has climbed to 67, reflecting a clear shift toward bullish momentum without yet entering deeply overbought territory. A daily closing price above $0.000005 would likely mark a structural shift in favor of buyers, giving swing traders a more solid technical basis to open long positions.
Former resistance turning into a key pivot
Recent price action around $0.0000042 has reaffirmed its significance as a short‑term pivot. Earlier analysis highlighted this level as a critical resistance area, and bulls finally drove a breakout above it on Monday, 29 December. However, that initial push failed to hold, and PEPE quickly surrendered most of its gains, underscoring how fragile bullish conviction still was at that time.
A second breakout attempt on Thursday, 01 January, fared much better. This time, buyers managed to sustain the move and build on it, pushing PEPE higher and reinforcing a strong short‑term bullish bias at the time of writing. The ability to reclaim and hold above prior resistance levels is often an early sign that market structure is beginning to shift in favor of buyers.
Intraday warning signs: bearish divergence on the 1‑hour chart
Zooming into the 1‑hour chart, however, reveals a reason for near‑term caution. A bearish momentum divergence has formed: While price continued to print higher highs, the momentum indicators failed to follow suit, instead making lower highs. This often signals that upward momentum is weakening and that a local top could be forming.
A divergence does not guarantee an immediate reversal, but it does raise the probability of a short‑term pullback. If such a dip materializes, the region between $0.0000046 and $0.0000049 could become an attractive demand zone. This area, previously a pocket of supply, might be retested as support, offering potential dip‑buying opportunities if buyers step in aggressively.
Friday’s close: a crucial inflection point for swing traders
For swing traders, the close of Friday’s trading session is particularly important. A clean break and daily close above the recent swing high at $0.000005 would be interpreted as confirmation of a bullish breakout. In that scenario, traders could justifiably look for long entries with a near‑term upside target around the next resistance level at $0.0000062.
On the flip side, if PEPE fails to secure a close above the $0.000005 swing high, the move would look increasingly like a failed breakout. Such failures frequently trigger stronger selling pressure as trapped late buyers rush to exit their positions. For more aggressive traders, that type of rejection could provide a fresh shorting opportunity with a bearish bias over the following sessions.
What a sustained breakout would need
For PEPE to convincingly break free of its broader downtrend, several conditions would ideally align:
– Multiple daily closes above $0.000005, turning this level into reliable support.
– A continued rise in OBV, signaling that real buying interest – not just short‑term speculation – is entering the market.
– A period of consolidation above resistance, with shrinking volatility and higher lows on shorter timeframes.
– A supportive macro backdrop, particularly a strong or at least stable Bitcoin that is not aggressively rejecting from major resistance.
If these pieces fall into place, the current 25%+ daily move could mark the early stages of a more durable trend reversal rather than just another relief rally within a larger downtrend.
Scenarios for short‑term traders
Traders watching PEPE in the near term can think in scenarios rather than predictions:
1. Bullish continuation scenario
– Price closes above $0.000005 on the daily.
– Subsequent pullbacks find support in the $0.0000046–$0.0000049 area.
– In this case, longs targeting $0.0000062 and potentially higher would be technically justified, with invalidation set below the reclaimed support zone.
2. Failed breakout and reversal scenario
– Price is rejected from $0.000005 and closes the day back below this level.
– Volume on the rejection spike increases, signaling strong selling interest.
– This setup favors short positions or at least caution with longs, with downside scope back toward $0.0000042 or even lower levels if selling accelerates.
3. Choppy range‑bound scenario
– PEPE oscillates between $0.0000042 and $0.000005 without a decisive break either way.
– In such environments, breakout traders often suffer whipsaws, while range traders may seek to buy near support and sell near resistance until a clear trend resumes.
Risk management around volatile memecoins
Memecoins like PEPE are notorious for dramatic intraday swings, sudden sentiment shifts, and liquidity pockets that can exaggerate both gains and losses. Even when technical indicators look favorable, traders need to:
– Define position sizes based on risk tolerance rather than emotions or recent performance.
– Use stop‑loss orders or clear invalidation levels to protect against rapid reversals.
– Avoid over‑leveraging, as high leverage plus high volatility can quickly wipe out capital.
– Treat short‑term trades as tactical moves, separate from any long‑term conviction about the asset.
How Bitcoin’s behavior could influence PEPE
PEPE’s prospects cannot be fully separated from the behavior of Bitcoin at the $90,000 resistance. If BTC decisively breaks above this level with strong volume and momentum, risk appetite across the market is likely to improve. In that environment, capital often rotates more aggressively into altcoins and memecoins, supporting broader rallies.
Conversely, another strong rejection from $90,000 could cool overall market sentiment. In that case, even technically promising setups on smaller coins often struggle to follow through. PEPE’s recent strength would then be more vulnerable to sharp corrections as traders de‑risk.
Long‑term holders vs. short‑term speculators
For long‑term PEPE holders, the current rally is encouraging but not yet definitive proof of a structural trend change. They may view this move primarily as a sign that demand is still present and that the asset can attract bursts of interest even after extended drawdowns.
Short‑term speculators, on the other hand, are likely focused almost entirely on the immediate levels: $0.0000046–$0.0000049 as a potential dip‑buy zone, $0.000005 as a key swing high, and $0.0000062 as the next upside objective. For them, the key is aligning entries and exits with these levels while managing risk tightly.
Bottom line
PEPE’s 26.9% daily surge, backed by a 300% jump in trading volume, is a clear sign that bulls are trying to wrest control from bears. The memecoin is pressing into – and in parts overcoming – a major daily supply zone, with indicators like the RSI and OBV beginning to lean in its favor.
Yet warning signs remain: a bearish divergence on the hourly chart, the proximity of a crucial swing high at $0.000005, and an uncertain macro backdrop with Bitcoin challenging but not yet conquering a major resistance level.
Whether PEPE truly breaks free from its downtrend or merely delivers another fleeting rally will hinge on how price behaves around these critical levels, especially into and after Friday’s close.
Disclaimer: The information provided is based solely on the writer’s analysis and opinion and should not be considered financial, investment, trading, or any other kind of professional advice. Trading and investing in cryptocurrencies involve significant risk, and every reader should conduct independent research and consider their own financial situation before making any decisions.