PIPPIN retraces after false breakout: Should traders buy or sell?

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PIPPIN retraces after false breakout: Should traders buy or sell？

Pippin [PIPPIN] faced a steep retracement in the past 36 hours of trading. An AMBCrypto report noted that the AI memecoin had outpaced Bitcoin [BTC] by 22% in 24 hours earlier this week.

A breakout past the short-term range highs at $0.755 was anticipated, but the report warned that this breakout might be false. A retracement back within the range was expected. This dip has arrived, but it extended to $0.533, deeper than anticipated.

Bitcoin has been under severe selling pressure recently. In the past 48 hours, the leading crypto has plummeted by 6.9%, from $68.4k to $63.7k. During the intense sell-off of the past two days, PIPPIN bulls have faced $2.64 million worth of long liquidations.

Why long-term PIPPIN outlook remains bullish

Source: PIPPIN/USDT on TradingView

The $0.5 demand zone had been highlighted earlier, and it has been retested by the 1-day sessions lower candlewick on Friday, the 27th of February. At the time of writing, PIPPIN retained the bullish daily structure as well.

A daily session close below $0.435 is necessary to flip swing traders biases bearishly. Until then, an approach of the $0.50-$0.55 would represent a buying opportunity.

Between the 14th and the 24th of February, the AI memecoin witnessed a bearish divergence between the price and the RSI. Combined with the Bitcoin sell-off, another visit to this demand zone appeared likely for Pippin.

To the north, the $1.15 Fibonacci extension level remained a valid price target.

Short-term buying opportunity for PIPPIN bulls

Source: PIPPIN/USDT on TradingView

The short-term Bitcoin weakness was no secret, but it was impressive that PIPPIN retained its bullish 1-day timeframe structure. Zooming in on the 1-hour chart, we can see that the $0.50 demand zone has already yielded a strong bullish reaction.

However, over the weekend, more volatility is likely, especially late on Sunday. The $0.466 area had a cluster of long liquidations that could attract the price lower, according to the CoinGlass liquidation heatmap.

Based on the evidence at hand, PIPPIN bulls can wait till the 2nd of March to see if $0.466 is tested. A bullish reaction here, combined with BTC holding its ground above $63k, could present a buying opportunity.

On the other hand, a drop below the short-term range lows at $0.435 would invalidate this bullish idea.