The memecoin Pepe (PEPE) is at a technical crossroads after being firmly rejected at a crucial resistance aligned with the 0.618 Fibonacci retracement. This level has proven to be a significant barrier, prompting a swift price pullback that now sees PEPE testing the Value Area Low (VAL) a critical zone within the current trading range.
Rejection from the Golden Ratio
PEPE’s recent rejection at the 0.618 Fibonacci level confirms the strength of the resistance zone. This retracement level is often considered a golden ratio in technical analysis and typically signals strong price reactions. The rejection has increased short-term volatility, with the token now hovering just above the VAL testing the lower boundary of its established range.
Crucial Support Holding for Now
Currently, PEPE is consolidating above the VAL, forming a potential higher-low scenario, which could lead to a bullish continuation. However, if this support fails, traders may witness a rotation toward the Point of Control (POC) a level of high volume and historical price interest, which also coincides with another 0.618 Fibonacci retracement. The POC could serve as a last line of defense for bulls hoping to preserve the current structure.
Volume and Structure to Dictate the Next Move
While the rejection may raise short-term concerns, the broader structure remains technically intact. PEPE is still within a valid accumulation range, and bullish traders are watching for confirmation signals like volume spikes or bullish candlestick patterns to initiate entries.
Adding to the potential bullish case is the possible formation of a double bottom, but analysts caution that this pattern alone isn’t enough. Traders need additional confluence like respecting support zones and reacting strongly from high-volume nodes to validate any long trade setups.
What Comes Next?
- Bullish Scenario: If PEPE maintains support at or above the POC and forms a confirmed higher low, a retest of the range highs could follow.
- Bearish Breakdown: If both the VAL and POC fail, price action may shift toward a deeper retracement, threatening the overall bullish structure.
While PEPE is facing a test of strength, its alignment with key Fibonacci levels, coupled with volume profile support zones, offers a roadmap for traders navigating this volatile range. All eyes are on whether the bulls can reclaim momentum or if a breakdown is on the horizon.
