Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Price chart indicators flashed sell signals on lower time frames.
- Long positions are discouraged, strengthening short sellers’ lead.
Bitcoin [BTC] hovered above $30,000 for about 19 days since June 21. BTC’s extensive consolidation and fluctuations have led most altcoins to massive pullbacks. In particular, Pepe [PEPE] has lost more than 20% – officially turning the pullback into a downtrend.
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At the time of writing, BTC was threatening to drop below USD 30,000. However, the BTC price has fluctuated between $29.5k and $31.5k in the past few days. If it crosses $29.5k, PEPE could immediately destroy lower supports.
Is more contraction likely?
Source: PEPE/USDT on TradingView
PEPE hit a new high of $0.00000190 amid a huge ETF-induced hype surrounding BTC. However, the ETF hype has since subsided, sending BTC into swings. PEPE made lower highs during the same period after gaining $0.00000190 on July 3.
The technical indicators also flashed sell signals. In particular, the Relative Strength Index reached lower highs, indicating that buying pressure has eased in recent days. In addition, On Balance Volume decreased while the Average Directional Index fell below 20, showing that demand was declining and PEPE was not trending strongly.
Short sellers could thus extend profits to lower support levels of $0.00000140 or $0.00000131. A further drop below $0.00000130 could make a retest of $0.00000100 more likely.
But if BTC secures the $29.5k support, PEPE’s recovery from the immediate support level could be likely.
How many Worth 1,10,100 PEPEs today?
More long positions are not recommended
Source: Coinglass
According to Coinglass, more than $500,000 worth of long positions have been liquidated at the time of writing. However, short positions suffered only about $20,000 in wreckage during the same period, reinforcing bearish sentiment in the futures market.
Nevertheless, the sentiment could turn bullish if BTC stabilizes and triggers a reversal near USD 29.5k. Thus, traders should monitor BTC’s overall sentiment and price action for better optimized trade setups.