PEPE coin price drops 3.19% after 84% surge, forming double top pattern

PEPE coin experienced a 3.19% correction on Friday, marking a pause in its recent rally that saw an 84% surge over three days.

The correction comes as on-chain data from IntoTheBlock showed a 257% increase in whale transactions on Friday, coinciding with PEPE’s peak price.

According to the data, transactions valued at over $100,000 reached 720 on Friday.

This spike in whale activity could be indicating a potential market top formation.

Historical data showed that transaction counts crossing the 800 mark usually precede price corrections for PEPE.

PEPE’s price action is forming what analysts described as a double top pattern near the $0.000015 resistance level.

PEPE price surged 100% from $0.0000075 on May 6 to $0.000015 on Friday, May 12. However, the token failed to break through the $0.000015 psychological barrier.

The price action led to a sideways shift with $0.1274 acting as a baseline support level. The consolidation created two price peaks, which technical analysts recognize as a double top reversal pattern after a 7.42% drop.

PEPE is the third-largest memecoin, lagging behind Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB). The token’s market cap has shown impressive growth, surging over 120% from around $2.4 billion in March to its current level.

This growth coincides with Ethereum’s rebound, which climbed nearly 60% from a low of $1,380 to above $2,500 during the same period.

The connection is not surprising considering PEPE is an ERC-20 token that tends to benefit from bullish momentum in the Ethereum ecosystem. Other Ethereum-based tokens also saw significant gains during this period.

While the price is currently correcting, on-chain metrics show PEPE’s holder count has climbed to over 432,000, suggesting continued retail interest and support for the token.

This growing user base could provide price stability during the current correction phase.

Technical Analysis:

Several technical analysis indicators suggest a potential bearish trend.

To complete the bearish double top pattern, PEPE price must drop to the $0.001274 neckline and break the short-term support trendline at that level.

A four-hour candlestick close below this neckline would confirm the breakdown. In such a scenario, the pattern projects a 25% crash to $0.00001063, calculated by adding the double top’s height to the neckline.

The Relative Strength Index (RSI) shows bearish divergence as it declines from the overbought zone to the halfway line during PEPE’s uptrend.

The MACD and signal lines are falling after a negative crossover, indicating growing bearish momentum.

However, trader sentiment remains overwhelmingly positive. Despite the short-term pause in PEPE’s rally, futures markets show heightened optimism for an uptrend continuation.

The Open Interest (OI) maintains a near record-high level at $583 million, indicating strong trader engagement.

On Binance, 72% of PEPE traders hold long positions, pushing the Long/Short ratio to 2.57. This extreme bullish tilt could be dangerous if the price continues to correct, potentially leading to a cascade of liquidations.

One trader on Hyperliquid opened a $2.3 million long position on PEPE with 3x leverage, showing substantial confidence in future price increases.

Crypto analyst CryptoKaleo suggested that the memecoin could consolidate before potentially surging toward a market cap between $10 billion and $20 billion.

If PEPE breaks past the immediate resistance and closes a daily candle above $0.0000159, it could gain another 31%, potentially reaching the next resistance around $0.00001946 to $0.00002000.

The most recent data shows that in the past 24 hours, PEPE’s trading volume has dropped by over 20%, and open interest has declined by 11.42%. As a result, more than $4.71 million in long positions have been liquidated.

PEPE’s price may find support at the $0.00001050 to $0.00001200 range, which could present a favorable re-entry opportunity for bullish traders if buying pressure remains intact.