Pepe’s price action (PEPE) has revealed interesting dynamics as it encounters local resistance in the market. Traders are closely monitoring this situation, as the recent rejection could be indicative of a bullish continuation setup. With the potential for forming a higher low, traders are eager to see if this will set the stage for a significant upward movement.
Currently, Pepe is testing a critical resistance zone, aligning perfectly with the 0.618 Fibonacci retracement level and the value area high from its local range. This area does not necessarily lead to a bearish sentiment but could act as a springboard for buyers. Instead of a sharp reversal, the market may experience a retracement that supports the formation of a higher low, a classic sign of bullish continuation.
- Local resistance area: Around the 0.618 Fibonacci retracement and value area high.
- Potential outcomes: A rejection may lead to a rise in swing low liquidity near the point of control.
- Market structure: The bullish structure remains intact if Pepe forms a higher low and reclaims support.
If the rejection does unfold as expected, analysts anticipate price action will rotate downward toward the point of control region, which coincides with the VWAP support level. This situation creates a strong technical confluence, as liquidity has been building under the current range. A sweep of that liquidity could align with a swing failure pattern (SFP)—if the price temporarily dips below the swing low and quickly reclaims it, confirmed higher low structure is likely, further establishing a bullish sentiment among traders.
Should this pattern come to fruition, traders could be looking at an upside potential of approximately 35%, provided that macro conditions remain favorable. It’s crucial to note that this scenario is highly dependent on strengthening major assets like Bitcoin and Ethereum. If these assets maintain their upward momentum, it’s reasonable to expect a bullish reaction from Pepe’s support levels.
However, if the point of control does not hold and the VWAP support fails, the bullish narrative could be invalidated, with the potential for further declines into lower levels. Currently, market dynamics lean toward a bullish continuation. The reaction around this technical region will be crucial, as the combination of the Fibonacci retracement, point of control, and liquidity profile all suggest that a bounce is more likely than a breakdown.
In conclusion, as long as Pepe retains support around the point of control and the VWAP confluence, the potential for a higher low remains favorable. Traders should monitor this situation closely, as confirmation of this setup could lead to a significant move back toward the recent swing high, resulting in a potential 35% upside. Conversely, a failure to maintain this support will shift the bias toward bearish sentiment and further downside risks.
