Three reasons why PEPE is expected to rise by 70% again in July

Author: Yashu Gola, CoinTelegraph; Compiled by Wuzhu, Jinse Finance

PEPE rebounded 17.85% two days after forming a local low of about $0.00001300, and is currently trading as high as $0.00001340 on June 12.

PEPE/USDT daily price chart. Source: TradingView

The rally has been accompanied by rising trading volumes, suggesting growing confidence among traders, which could further fuel upward momentum.

At least three indicators point to a strong outlook for the PEPE market, suggesting that the memecoin’s price could surge by a whopping 50% by the end of June.Let’s explore these potential catalysts in detail.

PEPE’s Rising Wedge Pattern Suggests 70% Upside Ahead

As of June 11, PEPE’s price is hovering near the lower trendline of the current rising wedge pattern, indicating potential support and a possible rally to the upper trendline at around $0.00002661, which would represent an upside of around 70% from current price levels.

PEPE/USDT daily price chart. Source: TradingView

A rising wedge usually resolves when price breaks below its lower trendline, accompanied by an increase in volume, leading to a sharp decline. However, PEPE’s continued rebound from the trendline suggests that such a breakout is not imminent.

Two key support levels near the wedge’s lower trendline support this potential rebound: the 50-day exponential moving average (50-day EMA; red wave) and the 1.0 Fibonacci retracement level.

However, a break below this support could trigger a bearish scenario with possible downside targets between $0.00000283 and $0.00000642 by the end of June or July, depending on the breakout point.

Accumulation by Whales Indicates Market Confidence

The PEPE market is showing bullish signs due to the continued accumulation and holding behavior of the largest investors.

The percentage of PEPE supply held by the largest holders (1 billion or more) remained relatively stable, fluctuating slightly around 96.02%. This suggests that the largest investors did not significantly adjust their positions during the price correction in June.

Distribution of PEPE supply among entities with 1 million unlimited token balances. Source: Santiment

Smaller holders, including those holding 10 million to 100 million PEPE and 1 million to 10 million PEPE, actively accumulated holdings during the price decline, indicating increased participation and confidence among retail investors.

Overall, the increase in the proportion of small and medium PEPE holders indicates that market interest and strategic overweight are expanding, thus raising the upside outlook for June.

Upcoming Fed decision and market reaction

PEPE is expected to rise 50% by the end of June on expectations that the Fed may cut interest rates in September.

UBS chief strategist Bhanu Baweja said that Fed Chairman Jerome Powell will keep the option of an early rate cut due to rising unemployment in the United States, which rose to 4% in May from 3.9% the previous month.

Bond traders also increased bets on a 250 basis point (bps) rate cut in September, with the probability rising to 50% ahead of the Federal Open Market Committee (FOMC) meeting on June 12, from 48.6% a month ago.

These bets led to a sharp drop in Treasury yields ahead of the FOMC meeting, with the benchmark 10-year Treasury yield falling 180 basis points in a day.

U.S. Treasury 10-year yield daily performance chart. Source: TradingView

Lower bond yields increase the opportunity cost of holding non-yielding risky assets like cryptocurrencies. This may increase traders’ interest in the riskiest memecoins like PEPE, Dogecoin, Bonk (BONK) in June.