Whale sell-off pressures PEPE near key support levels

Key takeaways

• PEPE is changing hands close to $0.00000348 following a bounce off the 200-day EMA line.
• Since August 25, addresses with 10 million to 100 million PEPE have offloaded 80 billion coins.
• Should PEPE drop under $0.00000313, a slide toward $0.00000230 may follow.

On Thursday, PEPE hovered around $0.00000348, still under strain after a key resistance level held.

On-chain metrics indicate that big holders are trimming their positions, which could add to sell pressure in the days ahead. At the same time, mixed derivatives data and softening technical indicators make PEPE vulnerable to a steeper decline.

PEPE whales cash in after mid-August gains

According to Santiment's Supply Distribution data, several of PEPE's biggest holders have been selling after the meme coin surged in mid-August.

Addresses that own 10 million to 100 million PEPE have together dumped about 80 billion tokens since August 25. The large-scale distribution hints that bigger investors are locking in profits from the recent rise.

In the same time frame, smaller and medium addresses in the 100,000 to 10 million PEPE range added 5.06 billion tokens to their holdings.

Yet the purchases by these smaller holders cover just a small portion of what the whales sold. That gap may hamper any recovery and keep short-term pressure to the downside.

The derivatives scene for PEPE shows conflicting signals. On Thursday, the long-to-short ratio was 1.05, near a more than one-month peak. A value above 1 means longs exceed shorts, signalling a modest bullish lean among traders.

In contrast, the funding rate tells a more cautious story. The open-interest-weighted funding rate dipped into negative territory on Wednesday and dropped to -0.0067% by Thursday.

A negative rate means shorts are paying longs, which normally indicates heavier bearish sentiment and runs counter to the optimism suggested by the long-to-short metric.

PEPE fails to break through 200-day EMA barrier

On Thursday, PEPE was near $0.00000348 after being turned back at its 200-day EMA around $0.00000364 in the prior session.

The unsuccessful breakout underscores the 200-day EMA as a crucial hurdle that buyers need to clear to take command.

Momentum gauges also point to fading buying pressure. The RSI is heading down toward the neutral 50 line, indicating that the earlier upside momentum is waning.

Last week the MACD generated a bearish crossover, and that signal still holds, strengthening the case for more downside.

The 50-day and 100-day EMAs for PEPE form a first support area around $0.00000320. Below that, key horizontal support stands near $0.00000313.

If PEPE closes below that zone on a daily basis, it would confirm a deeper pullback and open the door to the next heavy support near $0.00000230. That drop would amount to a roughly 34% loss from current levels.

On the flip side, PEPE needs to close above the 200-day EMA at $0.00000364 to dent the bearish scenario. A clean breakout might pave the way for a rebound to the next daily resistance around $0.00000442.