• PEPE’s bearish trend continued as it fell below the 20- and 50-day EMAs, but short-term volatility could provide some opportunities
• Memecoin derivatives data showed cautious optimism among buyers

The sentiment in the memecoin market improved as the total market capitalization increased by 10% to over $42 billion in the last 24 hours. Moreover, the Crypto Fear & Greed Index showed a “neutral” reading after remaining in the fear zone for a long time.

PEPE lost all of its short-term uptrend after recently falling below its 20-day and 50-day EMAs following a rebound from the resistance at $0.0000127. However, the memecoin’s recent rebound from the immediate support level has set the stage for buyers to re-enter the market.

At the time of writing, PEPE was trading at $0.0000086.

Can PEPE bulls reverse the short-term trend?

Source: TradingView, PEPE/USDT

PEPE had entered a relatively long-term bearish trend as the price action repeatedly marked lower highs and lows while losing key support levels.

Meanwhile, PEPE formed a descending channel pattern on its daily chart, representing a relatively high bearish edge, and fell below its 20-day and 50-day EMAs.

In this regard, it is worth noting that PEPE recently experienced an expected breakout from its descending channel, which helped buyers retest the resistance at $0.0000127 in mid-July.

However, the bears intervened and provoked a steep downtrend from this resistance level amid market uncertainty. This downtrend has now found support at the confluence of the horizontal and diagonal support levels near $0.0000065 – $0.000007.

The buyers would now try to provoke a short-term uptrend. Unfortunately, the resistance at $0.0000087 could pose short-term hurdles. If PEPE manages to close above this level, the bulls would attempt to retest $0.0000127 in the coming sessions.

On the other hand, if the overall market sentiment continues to deteriorate, the memecoin could test the next key support level at $0.0000049.

The Relative Strength Index (RSI) continued to show a bearish bias but was on an uptrend after falling into the oversold zone. A likely close above the 50 level can confirm the easing selling pressure.

Additionally, the Awesome Oscillator finally showed a green line after PEPE’s recent gains – an early indicator of a bullish bias.

Derivatives data revealed THIS

Source: Coinglass

The increase in open interest over the past 24 hours suggests that more traders have entered the market, possibly in anticipation of further price movements in PEPE.

While there is a near-balance between long and short positions, the slight bias towards shorts (with a long/short ratio of 0.9736) could be a sign of cautious optimism. However, the significant liquidations, especially on the short side, have highlighted volatility and the potential for further price action.