Pepe Coin (PEPE) Shows Early Signs of Weakening After a Strong 100% Rally

After a strong 100% rally last week, Pepe Coin shows early signs of weakening. A sharp rise in large-value whale transactions and bearish chart patterns has raised concerns.

Pepe Coin (PEPE) price shows early signs of weakness after a strong 100% rally last week. A sharp rise in large-value whale transactions and bearish chart patterns have raised concerns about a possible market top.

While recent technical signals suggest caution, retail sentiment remains bullish. Investors are now watching to see if Pepe's momentum can hold or quickly reverse.

Whale Transactions Point to Profit-Taking

Whale activity has increased noticeably, with IntoTheBlock data showing a surge in $100K+ transactions on May 12.

On that day, 720 transactions above $100K were recorded, which coincided with Pepe's local peak of $0.000015. These spikes in whale transactions usually occur when large holders are booking profits after significant price movements.

Past patterns suggest such increases in transactions above $100K usually happen near price tops. Similar activity was seen during May, November, and December 2024. Each time, the transaction spikes were followed by price pullbacks. Generally, the 800 transaction level signals massive profit-taking.

However, we are not yet at this volume of activity. But still, the current transactions could mean whales are reducing their exposure.

This combination of potential whale selling and slowing price momentum from new highs could lead to more short-term volatility for Pepe. This behavior is often a strong indicator that larger investors expect a correction or weaker growth going forward.

Double Top Pattern and Key Support Levels

Pepe's price has shot up from $0.0000075 to $0.000015 between May 6 and May 12, notating a 100% increase. However, the coin failed to break the $0.000015 resistance, leading to a sideways pattern. The price is now closer to the $0.00001274 baseline.

The technical charts are forming a Double Top reversal, which is a typical bearish pattern. But for this pattern to be complete, the coin needs to break the $0.00001274 neckline. If the prices do close below this level within the next four hours, then the setup will be confirmed, and the prices may move lower.

The potential downside of the Double Top is 25%, with a target at $0.00001063. This is determined by taking the pattern height and deducting it from the neckline level. This volume of decline would wipe out most of last week's gains.

But if the bulls manage to defend the support at $0.00001238, then the bears may face difficulties sustaining the selloff. A rebound from this zone could propel the price back towards the $0.000015 resistance.

Other measurements such as the RSI are already flashing weakness. The RSI has trended lower out of the overbought region, which signals a loss of momentum. The MACD lines are bearish with a cross under, which is confirming higher pressure from the bears.

Open Interest and Trader Sentiment Show Overexposure

The Open Interest in Pepe Coin futures is also high. As of the 14th of May, the data from Binance shows it at around $583.98 million, which is close to a record-high level. This signals increased activity of the traders but also raises the issue of long-position overexposure.

The Binance futures data reveals that 72% of the traders are Long, resulting in a Long/Short Ratio of 2.57. This indicates the strong bullish bias of retail traders. High Long Interest can help rallies but at the same time increases the likelihood of liquidations of longs if prices move lower.

The trends recorded in history show that when Open Interest spikes sharply, without corresponding price rises, corrections are likely. In the middle of December in 2024, a similar spike in Open Interest triggered a sharp pullback in the market.

If Pepe fails to maintain this level and pivots lower from here, then these leveraged positions could get dumped quickly.

If the support holds at current levels, it could lead to a bounce. However, if the price falls further and triggers a wave of liquidations, the correction could deepen. This would align with the projected target of $0.00001063 from the Double Top pattern.

Head and Shoulders Pattern Signals More Downside

The short-term charts now display a Bearish Head and Shoulders pattern. This configuration shows the Left Shoulder, Head, and Right-shaping Shoulder on the PEPE/USDT 30-minute chart. The neckline support is still undergoing a test.

If the price breaks below the neckline, then a more severe decline is likely. Analysts also note a possible bounce at the