Hassan Maishera
TL;DR
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PEPE is trading steady after falling 5% in the previous session.
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Open Interest has dropped nearly 15%, while funding rates have turned negative, signaling weakening market sentiment.
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On-chain data shows top holders reducing their PEPE positions and moving more tokens onto exchanges.
Pepe (PEPE) remained relatively stable on Tuesday after suffering a 5% decline in the previous trading session. Despite the pause in selling, the meme coin continues to show signs of weakening momentum as retail interest fades, derivatives data deteriorates, and large holders trim their positions.
With PEPE hovering near a critical support level, analysts are watching for a potential breakdown that could send the token significantly lower.
Futures Data Signals Declining Market Confidence
Derivatives metrics indicate that speculative interest in PEPE is losing momentum. According to CoinGlass, PEPE's Open Interest (OI) fell by nearly 15% following Monday's sell-off, reflecting a sharp reduction in the total value of outstanding futures contracts. Falling Open Interest often suggests traders are closing positions rather than opening new ones, pointing to reduced market participation.
At the same time, PEPE's funding rate slipped to -0.0081%, indicating that short sellers are paying long traders. Negative funding rates generally reflect bearish sentiment in the perpetual futures market and suggest traders are increasingly positioning for further downside.
On-chain data also points to growing selling pressure from major holders. Data from Santiment shows that the amount of PEPE held by top wallet addresses declined to 164.65 trillion tokens on Monday, down from 171.12 trillion at the end of June.
Meanwhile, holdings among the largest non-exchange wallets also decreased, falling from 86.38 trillion PEPE in early July to 85.19 trillion.
As whale balances declined, the supply of PEPE held on cryptocurrency exchanges increased from 18.62 trillion last week to 18.94 trillion.
The rise in exchange balances suggests more tokens are being transferred to trading platforms, potentially increasing available selling supply and adding pressure to the meme coin's price.
PEPE Tests Critical Fibonacci Support
From a technical perspective, PEPE continues to trade in a bearish structure. The token remains below both its 50-day Exponential Moving Average (EMA) at $0.00000285 and its 100-day EMA at $0.00000311, indicating sellers remain in control.
PEPE is now testing the 23.6% Fibonacci retracement level at $0.00000279, calculated from the swing high of $0.00000459 to the low of $0.00000223.
This level represents an important support zone. A decisive daily close below it could expose the Fibonacci anchor near $0.00000233, implying a potential decline of approximately 20% from current levels.
Technical momentum indicators also support the bearish outlook. The Directional Movement Index (DMI) shows the positive directional indicator (+DI) still holding above the negative directional indicator (-DI), but the Average Directional Index (ADX) has weakened to 18, signaling that bullish momentum is fading and the existing trend lacks strength.
Unless buyers return with stronger conviction, the current technical setup favors continued downside pressure.
The immediate focus remains on the $0.00000279 support level. If PEPE closes below this zone, sellers could target $0.00000233, reinforcing the prevailing bearish trend.
On the upside, the 50-day EMA at $0.00000285 serves as the first resistance level, followed by the 100-day EMA at $0.00000311.
Beyond those levels, the 50% Fibonacci retracement at $0.00000341 represents the next significant hurdle that bulls would need to reclaim to improve the token's near-term outlook.
