Pepe (PEPE) Forms Bullish Flag Pattern After 100% Rally, Targets $0.000020 Resistance

Pepe forms a bullish flag after a 100% rally in early May. With $527 million in open interest and a spike in funding rates, the meme coin targets resistance at $0.000020.

Pepe experienced a sideways movement in the 4-hour price chart, contained within the upper boundary of the channel at $0.000015 and the lower support at the lower psychological barrier, which also coincides with the 38.20% Fibonacci retracement level at $0.00001196.

This consolidation phase, spanning 11 days, contributed to compressing trend momentum. As the crypto market continues its bullish recovery, meme coins are also showing signs of renewed strength. In the past 24 hours, top meme coins like Dogecoin, Shiba Inu, and Pepe have risen by almost 5%.

Could Pepe's bullish comeback, evident in its 30% rally from the monthly lows, lead to a flag pattern breakout and propel the meme coin toward the 78.60% Fibonacci level at $0.000020?

Pepe Price Analysis

As the price hovers above the lower boundary of the channel and the 200 exponential moving average, it appears to be recovering from a period of compression.

A nearly 100% rally in early May propelled PEPE from the 2023 lows of $0.00000761 to highs of $0.000015. This price action completes a classic bull flag formation, with the rally serving as the flagpole and the consolidation phase forming the flag.

After reaching the highs, the price experienced a swift correction, reaching the 50% Fibonacci retracement level. Afterward, the meme coin encountered support at the 38.20% Fibonacci level, marking the lower boundary of the channel.

From this support, Pepe showed signs of recovery, moving above the 20 exponential moving average and the MACD average.

The MACD and signal lines remain in positive alignment, while the RSI is trending upward after crossing the midline. Together, these momentum indicators support an optimistic view for Pepe.

What’s Next For PEPE

As technical indicators continue to favor an optimistic view for Pepe, a successful breakout from the channel could target the 78.60% Fibonacci retracement level near $0.000020.

However, before reaching that level, the price may encounter resistance at the 50% Fibonacci level around $0.00001657, the midpoint of the rally from the March lows to May highs.

On the downside, key support remains at the lower boundary of the channel, closely followed by the psychological level at $0.000010.

Pepe Funding Rate Spikes High

In the derivatives market, bullish expectations of a breakout rally are also escalating. Open interest has risen by 3% to reach $527 million, nearing its all-time high, while short liquidations over the past 24 hours have exceeded $1 million.

According to the latest data, the funding rate for Pepe has spiked to 0.0145% after a period of consolidation around the 0% mark. This reflects a sharp rise in bullish sentiment and suggests growing anticipation of an upside move, which may be fueled by leveraged positions.

As the funding rate trends positive, it indicates that more traders are opening long positions, putting pressure on exchanges to locate US dollar liquidity to meet the increased demand for meme coins.