Pepe Coin Hits 2023 Low Amid Broader Crypto Market Decline

Pepe Coin, the third-largest meme coin, joined the broader cryptocurrency market in a steep downward trend, dropping to $0.0000156 — its lowest price since December 20. The decline coincided with a risk-off sentiment across global markets, where rising bond yields and a slump in American equities and cryptocurrencies led to widespread losses.

The Dow Jones index fell by 700 points, and both the Nasdaq 100 and the S&P 500 saw significant drops, with losses of 245 and 35 points, respectively. Bitcoin, a market leader, also saw a downturn, falling to $90,000. The overall cryptocurrency market capitalization dropped by 4%, reaching $3.19 trillion. The crypto fear and greed index moved to a neutral reading of 47, signaling increased market uncertainty.

Fed Hawkishness and Economic Data Fuel Market Worries

The ongoing crypto sell-off is driven by growing concerns that the Federal Reserve will maintain a hawkish stance, fueled by strong economic performance and a drop in the unemployment rate. U.S. unemployment figures showed a drop to 4.1% in December, with over 256,000 jobs added. This positive labor data has led to fears that the Fed will keep interest rates high for an extended period to combat inflation.

The upcoming Consumer Price Index (CPI) report, set to be released on Wednesday, will be crucial for shaping market expectations. Economists predict that inflation will have risen slightly from 2.7% in November to 2.9% in December. If these expectations hold, the Fed may maintain its aggressive stance on interest rates, which could continue to weigh on crypto and equity markets. Additionally, proposed policies from Donald Trump, including tariffs and deportations, are expected to add upward pressure on prices, further fuelling inflation concerns.

Pepe Coin’s Price Action and Technical Indicators

Pepe Coin’s price action has been concerning for investors, as the token formed a head-and-shoulders pattern on the daily chart — a bearish reversal indicator. The coin has also dropped below its 50-day and 100-day moving averages, signaling that the bears are gaining control. Both the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have shown bearish divergence, further confirming the downward trend.

A break below the 50% Fibonacci retracement level at $0.00001465 could signal additional downside, potentially driving the price towards the psychological support level of $0.000010.

Positive Futures Interest Amid the Decline

On a positive note, the futures open interest for Pepe Coin has remained steady, with open interest holding at $438 million on January 13. This stability is seen as a positive sign for the token, indicating that traders continue to show interest in the asset, despite the broader market downturn. However, as the market remains volatile, Pepe Coin’s price outlook will largely depend on upcoming economic data and the Federal Reserve’s actions in the coming months.

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