Pepe (PEPE) Coin Faces Bearish Risks From Technical Setups That Could Spell Serious Losses

The short answer to the question, is it the right time to buy Pepe (PEPE) coin, would be no. The Pepe crypto price faces bearish risks from technical

The price of Pepe (PEPE) crypto faced bearish risks from technical setups that could lead to substantial losses for the token.

Bearish Risks Compound For PEPE

The PEPE/USD pair showcased a bearish technical setup, known as the ‘head and shoulders pattern.’

Within the realm of technical analysis, the Head and Shoulders pattern has been widely recognized as a significant reversal configuration. As such, the pattern serves to indicate a potential shift from an uptrend to a downtrend in market prices.

The pattern is characterized by the formation of three distinct and consecutive peaks on a chart. The central peak, known as the Head, stands notably taller than the two flanking peaks, which are termed the Shoulders.

The formation begins with the initial rise and subsequent decline of prices to a level of support, which later acts as the ‘Neckline’ for the entire formation. Following this initial decline, prices surge to create the highest peak, the Head, before retreating to the level of the Neckline.

Finally, the rise and subsequent fall of the second Shoulder completes the pattern, which typically aligns in height with the first shoulder and rests at the neckline.

Upon breaking below the Neckline, the pattern is confirmed, and the price target is calculated as the distance between the highest point of the Head and the Neckline. Applying this rule to the PEPE/USDT coin pair, the price risks dropping 60.5% from the Neckline to reach the theoretical price target around $0.00000303.

Moreover, zooming in on the daily price chart reveals another bearish cue for the Pepe coin.

The memecoin was trading within a descending price channel. As such, if the PEPE/USD pair were to drop to test the support line of the channel, the memecoin would end up being priced around $0.00000525, shedding over 31% along the way.

Both bearish patterns stood to drive the PEPE price down, ultimately leading to losses for the token’s buyers.

Downtrend Continues For PEPE Crypto

Meanwhile, PEPE crypto had been in a downtrend since Aug . 25, losing over 21% to reach a daily low of nearly $0.0000075 on Aug. 28. The downtrend may have led traders to consider buying the dip, asking themselves if it was the right time to buy PEPE coin.

If the downtrend were to continue, the price of the PEPE coin could test the support levels around $0.0000068 and $0.0000059.

On the other hand, an uptrend forming here would see the memecoin’s price encounter resistance levels around $0.0000086 and $0.00001 before facing a downturn.

The RSI for PEPE coin remained neutral, with a score of 42.02 on the daily charts.