One analyst has explained that PEPE could currently break out of the descending channel pattern and move towards these targets.
PEPE has recently exited a declining parallel channel
In a new after on X, analyst Ali pointed out how the 4-hour PEPE price is currently breaking out of a declining parallel channel. In technical analysis, a ‘parallel channel’ refers to the area enclosed by two parallel trend lines into which the price of the given asset has recently entered.
Overall, the price is likely to encounter resistance at the upper line of the channel, while the lower level could act as a source of support. For this reason, it is of course likely that tops and bottoms will occur on the respective trend lines.
In the context of the current discussion, a parallel channel, called a descending channel, is of interest. As the name suggests, this channel represents a downtrend in the asset.
The upper line of the descending parallel channel is drawn by connecting the lower highs in the commodity price. Likewise, the lower level converges with lower lows.
Normally, breakouts from the channel can be significant as they can imply a continuation of the trend. This means that if the breakout comes from the upper line, it could be a bullish signal, while a drop below the lower level could be a sign that the bearish trend is getting stronger.
Here is the chart shared by the analyst highlighting a descending parallel channel pattern that has recently formed in the 4-hour price of PEPE:
Looks like PEPE has been showing a break above this pattern recently | Source: @ali_charts on X
As shown in the chart above, PEPE had been trending within this descending parallel channel pattern until the past 24 hours, when the meme coin made a sharp 16% jump and broke out of the upper level of the channel.
This rapid rise in the cryptocurrency’s price came about when Bitcoin spot ETFs received approval from the US SEC. While BTC itself has only seen 4% of this bullish news, altcoins across the sector have continued to rally and started showing significant gains.
With PEPE now appearing to break out of the descending parallel channel, the meme coin could continue its bullish momentum, as has often happened historically with such breakouts.
Of course, that would only be the case if the breakout is truly confirmed, as the coin is only just starting to rise above it. In the chart, Ali has highlighted the levels that PEPE could eventually reach if this bullish pattern materializes.
$0.0000016 and $0.0000019 are the two price levels the analyst highlighted for the asset, as they are at distances half and full length of the channel respectively.
If the coin were to hit the former, it would have risen almost 11% from the current price level, while a rise towards the latter would indicate an increase of over 31%.
PEPE Award
After the sharp rise over the past day, the asset’s price is now trading around $0.000001446.
The price of the asset seems to have shot up over the past day | Source: PEPEUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com
Disclaimer: The article is for educational purposes only. It does not represent NewsBTC’s views on buying, selling or holding investments and of course investing involves risks. You are advised to conduct your own research before making any investment decisions. Use the information on this website entirely at your own risk.