PEPE risks a deeper correction as whales sell 80 billion tokens

Key takeaways

• PEPE trades near $0.00000348 after rejection at its 200-day EMA.
• Whales holding 10 million to 100 million PEPE have sold 80 billion tokens since August 25.
• A break below $0.00000313 could trigger a correction toward $0.00000230.

Pepe (PEPE) remained under pressure on Thursday, trading near $0.00000348 after failing to overcome a crucial resistance level.

On-chain data shows that large holders have been reducing their positions, potentially increasing near-term selling pressure. Meanwhile, conflicting derivatives signals and weakening technical momentum leave PEPE exposed to a deeper price correction.

PEPE whales take profits after August rally

Santiment’s Supply Distribution data shows that some of PEPE’s largest holders have been selling tokens following the meme coin’s strong gains in mid-August.

Wallets holding between 10 million and 100 million PEPE have collectively offloaded approximately 80 billion tokens since August 25. This substantial distribution suggests that larger investors are taking profits after the recent rally.

Over the same period, smaller and mid-sized wallets holding between 100,000 and 10 million PEPE accumulated a combined 5.06 billion tokens.

However, buying from these smaller investors represents only a fraction of the amount sold by whales. The imbalance could limit PEPE’s recovery and maintain downward pressure in the short term.

PEPE’s derivatives market presents a mixed outlook. The token’s long-to-short ratio stood at 1.05 on Thursday, close to its highest level in more than a month. A reading above 1 indicates that long positions outnumber shorts, suggesting that slightly more traders expect PEPE to rally.

However, funding-rate data points to a more cautious market. PEPE’s open-interest-weighted funding rate turned negative on Wednesday and fell to -0.0067% on Thursday.

A negative funding rate means short-position holders are paying traders with long positions. This typically reflects stronger bearish positioning and contradicts the optimism shown by the long-to-short ratio.

PEPE rejected at 200-day EMA resistance

PEPE traded around $0.00000348 on Thursday after facing rejection at its 200-day exponential moving average near $0.00000364 during the previous session.

The failed breakout highlights the 200-day EMA as an important barrier that bulls must overcome to regain control.

Momentum indicators also show that buying pressure is weakening. The Relative Strength Index is moving lower toward the neutral level of 50, suggesting the earlier bullish momentum is fading.

The Moving Average Convergence Divergence indicator produced a bearish crossover last week, which remains in place and reinforces the risk of further losses.

PEPE’s 50-day and 100-day EMAs provide an initial support zone near $0.00000320. The next important horizontal support sits around $0.00000313.

A daily close below this area could confirm a deeper correction and expose PEPE to its next major support near $0.00000230. Such a move would represent a decline of approximately 34% from its current price.

Conversely, PEPE must close above the 200-day EMA at $0.00000364 to weaken the bearish outlook. A successful breakout could open the door to a recovery toward the next daily resistance at approximately $0.00000442.

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