After a dramatic downturn from its all-time highs, the meme coin Pepe is flashing signs of a potential comeback. Despite losing more than 80% of its value since December, technical indicators suggest the token could be gearing up for a significant breakout — possibly reversing months of bearish pressure.
Pepe’s Recent Price Action
Pepe, the third-largest meme coin by market cap, peaked at $0.00002833 late last year, riding a wave of retail speculation and market hype. However, the rally was short-lived. Like many meme tokens in 2024, it tumbled sharply — sinking over 80% and dragging its valuation back to early support zones.
This decline mirrored the performance of broader meme coin markets, many of which saw steep pullbacks following a speculative surge earlier in the year.
Two Chart Patterns Hint at a Reversal
Despite the steep fall, chart analysis suggests that Pepe may be carving out a foundation for a bullish reversal.
Falling Wedge Formation
Pepe’s daily chart shows the emergence of a falling wedge — a classic bullish reversal pattern. This setup is defined by two downward-sloping trendlines converging over time. The upper line connects lower highs dating back to December, while the lower boundary tracks declining lows since November. A breakout above the upper trendline would signal a shift in momentum.
Double Bottom Support
Adding fuel to the bullish case is a double bottom pattern centered at the $0.0000060 level. This pattern, often seen as a reversal signal, reflects two failed attempts to break lower, separated by a brief recovery. The neckline of this formation — around $0.00002830 — aligns with Pepe’s historical peak, suggesting a breakout could target that level again.
Interestingly, this neckline also intersects with the key pivot point on the Murrey Math Lines tool, a signal often used to identify reversal zones.
RSI Breakout Confirms Bullish Bias
The Relative Strength Index (RSI) has been steadily climbing and has recently broken above the descending trendline drawn from January’s highs. This crossover may confirm a momentum shift in favor of bulls, indicating rising buying pressure.
With all these elements in place, analysts now forecast a potential rally toward $0.00002095 — the previous local high from January 19. That would mark a 220% gain from current levels.
Downside Risk Remains
While the technical setup is encouraging, traders must also consider the downside risk. A break below key support at $0.000002980 — a critical weak stop and reverse (WSAR) level on the Murrey Math Lines — could invalidate the bullish outlook and trigger renewed selling pressure.
Potential Catalysts Supporting Pepe’s Recovery
Beyond technicals, there are several macro and market-specific factors that could accelerate Pepe’s recovery in the near term.
1. Cooling U.S. Inflation
Recent inflation data out of the United States was better than expected. The Consumer Price Index (CPI) dropped from 3% to 2.8%, while core inflation slipped from 3.3% to 3.2%. Lower inflation may encourage the Federal Reserve to cut interest rates sooner than anticipated — a move that historically favors risk-on assets like cryptocurrencies, especially speculative altcoins.
2. Rising Futures Open Interest
Pepe’s futures open interest climbed to $198 million this week — the highest since early March. While still well below its yearly peak of $556 million, this uptick suggests renewed investor interest. Historically, major rallies often begin when open interest is climbing from low levels, as it reflects fresh positioning and appetite for exposure.
3. Lunar Cycles and Sentiment Shift
In the realm of crypto, even astrological events sometimes capture traders’ attention. Some market participants believe that the upcoming lunar eclipse could mark the end of the current crypto sell-off cycle. While purely speculative, sentiment-driven assets like meme coins have a history of reacting to unconventional catalysts — and a sudden narrative shift could spark renewed interest in Pepe.
Conclusion: Is Pepe Ready for Liftoff?
Pepe’s recent collapse has shaken investor confidence, but the charts tell a more nuanced story. With a falling wedge, double bottom, and bullish RSI crossover all aligning — and macroeconomic tailwinds like cooling inflation in play — the conditions for a breakout are building.
Should the coin hold above $0.0000060 and break resistance in the days ahead, a surge toward $0.00002095 could follow — marking a significant rally from its current level. That said, the setup remains vulnerable to external shocks and broader market sentiment.
For now, Pepe traders may be wise to watch the key support and resistance levels closely. If the patterns play out, the meme coin could once again become the center of crypto’s speculative spotlight.
