Pepe (PEPE) Flashing Potential Warning Signs as Its Rally Shows Signs of Fatigue

After many days of increases, Pepe is flashing potential warning signs as its rally shows signs of fatigue. After recording a 50.40% surge in just the last seven days, technical indicators now suggest a potential pullback could be on the horizon.

Pepe price has shown signs of potential warning as its rally begins to show fatigue after many days of increases. Technical indicators now suggest a potential pullback could be on the horizon.

After rising 50.40% in just seven days, the TD Sequential indicator on the daily chart for PEPE has reached a critical juncture, suggesting a shift in momentum. The indicator, created by technical analyst Tom DeMark, is known for providing signals for continuations and reversals in trends.

The indicator has been spot-on with PEPE daily chart. And it's now flashing a sell signal, suggesting a potential pullback ahead. pic.twitter.com/3aTrPUHI4A

The indicator had previously signaled the beginning of the current bull market in April, when PEPE was trading at around $0.000005. At the time, the TD Sequential indicator formed a buy signal, which was followed by a sharp increase in price.

As the price continued to rise, it encountered several resistance levels, which were easily breached. This signaled strong buying pressure and fueled further gains in the market.

However, the recent sell signal suggests that the buyers' strength may be waning, and the price could pull back from its recent highs. This signal is also being formed at a crucial psychological barrier, which could act as a magnet for profit takers.

Pepe Rally Exhausted

The chart marks three critical inflection points using what appears to be a trend exhaustion model. The earliest signal, marked "A13" on May 6, indicated a bullish pivot at the 0.236 Fibonacci level ($0.00000722). This coincided with a rebound after a sustained downtrend in late April. The bullish signal proved accurate, as PEPE subsequently staged a rally. It broke through several resistance levels, including the 0.382 ($0.00000834). Additionally, Pepe moved past 0.5 ($0.00000938), and 0.618 ($0.00001054) Fibonacci zones.

The second signal, marked as "1" with a green arrow on May 9, appeared just before PEPE catapulted past the 0.786 retracement ($0.00001245). Here, it made a sharp move toward the full 1.0 Fibonacci extension at $0.000015394.

The most concerning aspect is the third signal on the chart, marked again as "1" but this time with a red downward arrow. It suggests a bearish reversal or at least a period of consolidation. This signal coincides with the price hovering just below the $0.000015394 resistance.

This raises the possibility of the formation of a local top. The price has already retraced to the $0.00001350 range, aligning with the market cooling down after a week of aggressive buying.

Crypto Market Signals Support for Sell Recommendations

The market context adds weight to the sell signal. While PEPE has outperformed impressively, gaining 50.40% in a week compared to just 2.60% for the crypto market, such explosive growth often attracts short-term profit takers.

Traders may view this moment as an ideal opportunity to lock in gains, especially with the meme coin now facing resistance ahead. The psychological barrier around the $0.000015 level may act as a magnet for sell orders.

If the price fails to establish support above the key level, traders should anticipate a potential retracement toward the 0.786 ($0.00001245) Fibonacci or even 0.618 ($0.00001054) Fibonacci levels.

While the long-term uptrend remains intact, traders are advised to monitor volume and candle structure closely over the next few sessions for optimal decision-making.

If bearish momentum intensifies and breaks through the lower support level, the pullback could deepen further. Conversely, consolidation followed by a clean breakout above $0.000015394 would invalidate the sell signal and open the door for further gains in the short term.