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$PEPE price slipped below $0.00008 on Monday, August 12, marking a 15% decline over the last three days. While bulls who bought the dip during last week’s rebound are booking profits, derivatives market data suggests the ongoing $PEPE correction could be a bear trap.
$PEPE Price Fails to Flip $0.00001 Resistance
The $PEPE price rally stalled over the weekend following a remarkable rebound from the August 5 market crash. The initial negative sentiment surrounding the $PEPE market started to fade after the crash, with a strong rebound that saw the price climb significantly.
The bullish news from Brazil approving spot $SOL ETFs and Russia authorizing crypto mining provided an additional boost. These developments propelled $SOL to a 54.3% rally between August 5 and August 9, reigniting investor interest in the broader crypto markets.
However, this bullish news cycle may have created an artificial demand surge without any real short-term improvement in market fundamentals. The substantial gains on a weekly timeframe prompted short-term traders to book profits. Consequently, $PEPE price rejected at $0.00008, leading to a 15% decline over the weekend.
Instead of holding out for a $0.000010 breakout, many short traders opted to lock in profits generated from $PEPE’s 57% rebound between August 5 and August 9. Recent movements in $PEPE derivatives markets, however, suggest that this could be a bear trap.
Bulls Traders Standing Their Ground with $5.48M Leverage Positions
Despite $PEPE’s 15% correction, there has not been a corresponding negative shift in short-term traders’ sentiment. Coinglass’ Liquidation Map, which shows the value of active leverage positions around key price levels, highlights the current situation.
Currently, there is a concentration of leverage LONG positions around key price levels, underscoring the potential for a bear trap.
$PEPE’s long leverage positions currently stand at $5.48 million, while bears only have $5.13 million in active short positions. The fact that long positions outweigh shorts by $0.35 million after a 15% dip suggests that bull traders are determined to defend their positions.
If bears fail to force a decisive breakdown below $0.000082, this could evolve into a bear trap—a scenario where a price decline lures in short sellers, only for the price to reverse and rise sharply, trapping the shorts in losing positions.
$PEPE Price Forecast: Next Rally Could Trigger $0.000010 Breakout
Although overall crypto market sentiment remains bearish, data shows that $PEPE bulls are exhibiting strong resilience. This resilience could see $PEPE maintain relatively high support levels and potentially spark a major breakout in the next phase.
If $PEPE price manages to hold above $0.000082, a bullish sentiment could begin to dominate, leading to another rally. A successful rally could target the $0.000010 resistance level, which, if broken, might pave the way for further gains.
Key support remains at $0.00008, where bulls are likely to defend their positions vigorously. A break below this level could invalidate the bullish outlook, but a strong bounce from here might reignite buying interest, driving the price toward the $0.000010 level.
Given the current technical indicators and market conditions, the next $PEPE rally could indeed trigger a breakout past $0.000010, signaling a potential shift in market momentum.