Double Top Pattern Forms as Whale Transactions Rise 257%

Tech

Double Top Pattern Forms as Whale Transactions Rise 257%

• PEPE price dipped 3.19% to $0.00001399 after reaching $0.000015, forming a double top
• Whale transactions spiked 257% to 720 on May 12, potentially signaling a market top
• Despite bearish signals, 72% of Binance traders maintain PEPE long positions
• PEPE remains the third-largest memecoin by market cap at $5.9 billion
• Technical analysis suggests a possible 25% correction to $0.00001063

PEPE coin has experienced a volatile week, with its price currently trading at $0.00001399 after a 3.19% drop. This follows an impressive 84% surge over three days that pushed its market capitalization to $5.9 billion. The recent price action has formed what analysts describe as a double top pattern near the $0.000015 resistance level.

The correction comes as on-chain data shows a 257% increase in whale transactions on May 12, coinciding with PEPEs peak price. According to data from IntoTheBlock, transactions valued at over $100,000 reached 720 on that day.

This spike in whale activity often signals a potential market top formation. Historical data shows that transaction counts crossing the 800 mark have typically preceded price corrections for PEPE.

PEPEs price jump was remarkable, climbing 100% from $0.0000075 to $0.000015 between May 6 and May 12. However, the token has struggled to break through the $0.000015 psychological barrier.

The current price behavior has resulted in a sideways shift with $0.00001274 acting as a baseline support level. The consolidation has created two price peaks, which technical analysts interpret as a double top reversal pattern after a 7.42% drop.

Market Position and Broader Context

PEPE holds its position as the third-largest memecoin by market capitalization, trailing only Dogecoin (DOGE) and Shiba Inu (SHIB). This ranking showcases its strong standing in the increasingly popular memecoin sector.

The tokens recent performance is part of a broader memecoin rally. The overall memecoin market capitalization jumped from $55 billion at the beginning of May to $72.2 billion just 12 days later, representing a 45% increase.

PEPE‘s market cap has shown even more impressive growth, surging over 120% from around $2.4 billion in March to its current level. This growth has been partly fueled by Ethereum’s rebound, which climbed nearly 60% from a low of $1,380 to above $2,500.

The connection to Ethereum is not surprising, as PEPE is an ERC-20 token that tends to benefit from bullish momentum in the Ethereum ecosystem. Other Ethereum-based tokens have seen similar gains during this period.

While the price is currently correcting, on-chain metrics show PEPEs 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 Outlook and Trader Sentiment

Technical analysis of PEPEs price chart reveals several warning signs. To complete the bearish double top pattern, PEPE price must drop to the $0.00001274 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 tops height to the neckline.

Pepe Price on CoinGecko

The Relative Strength Index (RSI) shows bearish divergence as it declines from the overbought zone to the halfway line during PEPEs uptrend. The MACD and signal lines are falling after a negative crossover, suggesting growing bearish momentum.

However, trader sentiment remains overwhelmingly positive. Despite the short-term pause in PEPEs 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. Meanwhile, 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, PEPEs 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.

PEPEs 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.