PEPE Correction Ends — Buy Signal Flashes as Price Eyes 35% Rally

Key Takeaways

• PEPE’s price has retested $0.000010, backed by a positive price DAA divergence reading.
• On-chain data shows support at the current price that outpaces the overhead resistance.
• With rising directional strength, PEPE’s price will likely climb by double-digits soon.

The Pepe (PEPE) coin price was $0.000021 a month ago, but it plunged 55% in the following weeks.

However, in recent days, the memecoin has rebounded from its $0.0000089 support level, pushing its price to $0.000010. However, the key question now is whether PEPE can sustain this recovery.

PEPE Has More Room to Fly

From an on-chain perspective, PEPE’s 55% correction coincided with a notable decline in user interaction with the token. According to Santiment, the price-Daily Active Addresses (DAA) divergence was negative between Jan. 10 and Feb. 7.

The DAA represents the number of unique crypto addresses interacting with a specific coin. As a key on-chain metric, it strongly indicates user engagement and overall network activity.

When combined with the price, the indicator shows if it is an entry position or exit. Typically, when the price DAA divergence is negative, it is a sell signal, indicating that the price is unlikely to increase.

However, the PEPE coin price DAA divergence is positive in this case. This position indicates a buy signal as user participation increases alongside the price.

Should the metric’s reading stay positive, PEPE’s value might continue to climb.

Like the metric above, the In/Out of Money Around Price (IOMAP) supports a further price increase.

With the IOMAP, one can spot support and resistance points using the volume of tokens in unrealized profits or losses. A high volume of tokens in profit strengthens support, while a larger volume of tokens at a loss indicates a resistance zone.

As shown below,  the PEPE coin price has strong support at $0.000010, where over 8,000 addresses accumulated 19.53 trillion tokens.

This support level outweighs the next key resistance at $0.000011, where 13,000 trillion tokens remain in unrealized losses.

Considering this disparity, the PEPE coin price increase is likely to accelerate.

PEPE Price Breaks Out of Downtrend

From a technical standpoint, CCN observes that the Directional Movement Index (DMI) aligns with a sustained uptick. The DMI assesses if the asset’s price will likely increase or decrease.

The +DMI (green) seems to be recovering from its lows for the PEPE coin price. The -DMI (red), on the other hand, has turned downwards, indicating that the earlier decline has become weak.

In addition, the Average Directional Index (ADX), shown in yellow, has surged to 37.50, indicating strong upward momentum. This indicates that the upward directional movement is strong.

If sustained, PEPE’s price might jump by 35% and rally to $0.000014. If buying pressure increases, this target could increase, and PEPE could hit $0.000020.

On the contrary, failure to break above the 0.786 Fibonacci level could render this prediction null and void. In that case, PEPE’s price might retrace below $0.000088.