Pepe (PEPE) bounced 17.85% two days after forming a local low at around $0.00001300, as Cointelegraph anticipated earlier, and currently trading for as high as $0.00001340 on June 12.
This rebound accompanied a rise in trading volumes, indicating stronger conviction among traders, which can further fuel the upward momentum.
At least three indicators indicate a strong bullish outlook for the PEPE market, suggesting that the memecoin could experience a significant 50% price increase by June's end. Let’s explore these potential catalysts in detail.
PEPE's rising wedge pattern hints at 70% gains ahead
As of June 11, PEPE's price was hovering around the lower trendline of its current rising wedge pattern, indicating potential support and a likely rebound toward the upper trendline at around $0.00002661, up approx. 70% from the current price levels.
Rising wedges usually resolve when the price breaks below the lower trendline, accompanied by increased trading volume, leading to a significant drop. However, PEPE’s ongoing rebound from the trendline indicates that such a breakdown is not imminent.
Two critical support levels near the wedge’s lower trendline support this potential rebound: the 50-day exponential moving average (50-day EMA; the red wave) and the 1.0 Fibonacci retracement line.
Related: PEPE trading volumes surge 3X from start of May just days after ATH
Nevertheless, a break below this support confluence could trigger a bearish scenario, with possible downside targets ranging between $0.00000283 and $0.00000642 by June's end or in July, depending on the breakdown point.
Whale accumulation signals market confidence
PEPE's market shows bullish signs due to its largest investors' continued accumulation and holding behavior.
The percentage of PEPE supply held by the largest holders—1 billion or more—remains relatively stable, fluctuating slightly around the 96.02% mark. This indicates that the largest investors are not significantly altering their positions during June's price correction.
Smaller holders, including those with 10 million to 100 million PEPE and 1 million to 10 million PEPE, have been actively accumulating during price dips, suggesting increased participation and confidence among retail investors.
Overall, the growing percentage of smaller and mid-sized Pepe holders indicates broadening interest and strategic accumulation in the market, boosting its upside prospects in June.
Fed’s Upcoming Decisions and Market Reactions
PEPE's potential for a 50% rally by June’s end is bolstered by expectations that the Federal Reserve may cut interest rates in September
According to UBS Chief Strategist Bhanu Baweja, Fed chairman Jerome Powell will keep the options to slash rates earlier than anticipated due to a rising unemployment rate in the United States, which rose to 4% in May from 3.9% the month prior.
Bond traders have also increased their bets for a 250 basis point (bps) rate cut in September, with their probabilities rising to 50% ahead of the Federal Open Market Committee's (FOMC) meeting on June 12 from 48.6% a month ago.
These bets are resulting in a sharp decline across Treasury yields ahead of the FOMC meeting, with returns on the benchmark 10-year note falling 180 bps in a day.
Lower bond yields increase the opportunity costs of holding non-yielding risk assets like cryptocurrencies. This may increase traders’ appetite for the riskiest memecoins like Pepe, Dogecoin (DOGE), Bonk (BONK), and others in June.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
