Pepe Coin (PEPE), the third-largest meme coin, has entered a steep downward trend, reflecting the broader crypto market decline. PEPE dropped to $0.0000156, its lowest level since December 20, 2024, raising concerns over further price drops as bearish patterns emerge.

Market Conditions Impacting Pepe Coin

Macro-economic factors driving the decline

• Risk-off sentiment: Investors are moving away from riskier assets due to rising concerns over Federal Reserve policies.
• Market downturn: The Dow Jones fell by 700 points, and the S&P 500 and Nasdaq 100 saw significant declines.
• Bitcoin slump: BTC dropped to $90,000, pulling the broader market downward.
• Crypto market cap: Total market capitalization fell by 4% to $3.19 trillion.

These market dynamics have fueled Pepe Coin’s latest price slide.

Economic Indicators Fueling Bearish Sentiment

Interest rate fears weigh on crypto markets

• U.S. Unemployment Rate: Dropped to 4.1% in December, with 256,000 new jobs added.
• Inflation concerns: The upcoming Consumer Price Index (CPI) report could reveal a rise in inflation from 2.7% to 2.9%.
• Federal Reserve stance: Higher inflation may prompt the Fed to maintain high interest rates, pressuring crypto markets.
• Political factors: Proposed policies by Donald Trump, including tariffs and deportations, could further drive up prices.

These factors contribute to investor anxiety, negatively impacting Pepe Coin and other assets.

Technical Analysis: Bearish Patterns for Pepe Coin

Risky chart patterns signal potential further decline

• Head-and-Shoulders Pattern: A classic bearish reversal indicator has formed on the daily chart.
• Moving Averages: Pepe has fallen below its 50-day and 100-day moving averages, confirming bearish momentum.
• Bearish Divergence: The Relative Strength Index (RSI) and Percentage Price Oscillator (PPO) indicate weakening bullish strength.
• Fibonacci Level at Risk: A drop below the 50% Fibonacci retracement level at $0.00001465 could push the price toward $0.000010.

These technical signals suggest that PEPE may face continued downward pressure.

Market Sentiment and Futures Activity

Stable open interest may offer a glimmer of hope

Despite the downturn, Pepe Coin’s futures open interest remains steady:

• $438 million in open interest as of January 13, 2025.
• Stable futures activity suggests ongoing interest from traders.

While bearish patterns dominate, consistent open interest could indicate long-term investor confidence.

Potential Catalysts for Future Price Movement

Key events that could influence PEPE’s direction

• Consumer Price Index (CPI) Report: Scheduled for release on Wednesday—a crucial indicator for market sentiment.
• Federal Reserve Policy Updates: Any hint of rate hikes or continued hawkish tone may intensify selling pressure.
• Global Economic Trends: Broader market performance, especially in equities and bonds, will impact crypto assets.

A positive shift in these factors could help Pepe Coin stabilize or recover.