Pepe, the popular frog-themed meme coin, has entered turbulent waters once again. After failing to break through the 50-day Exponential Moving Average (EMA), the token now hovers at a crucial support zone. As bearish sentiment intensifies, traders are questioning whether the price will bounce or tumble down to $0.0000050 under the weight of overleveraged long positions.

Pepe Drops Below 50-Day EMA as Momentum Stalls

Following Bitcoin’s dip below $84,000, several meme coins, including DOGE, SHIB, and PEPE, have felt the squeeze. Each has registered a 3% to 5% decline over the last 24 hours, with Pepe currently trading at $0.0000070, showing signs of weakening bullish momentum.

Pepe had recently attempted a breakout from a falling wedge pattern, typically a bullish reversal setup, but quickly lost steam. Price action peaked at $0.0000077 over the past week before running into stiff resistance at the 50-day EMA. Since late March, this technical level has served as a dynamic barrier, rejecting multiple bullish attempts.

The rejection has produced long-wick candles on Pepe’s chart, a signal of increasing selling pressure. Now, the asset appears poised to retest the upper boundary of the previously broken falling wedge pattern. If support holds at this level, it could serve as a springboard for a recovery.

However, the MACD is telling another story. Both the MACD and signal lines are nearing a bearish crossover, which could confirm an extended downtrend if the crossover materializes.

Is Suspicious Buying Activity Fueling Concerns?

Adding another layer of intrigue, five newly created wallets purchased 611 billion PEPE tokens worth around $4.28 million at current price  the last 24 hours. What’s drawing scrutiny is the origin of the funds. All five wallets were funded via Ethereum withdrawn from Tornado Cash, a well-known crypto mixer, about 15 days ago.

This raises a chilling question: Are bad actors accumulating Pepe at discounted prices?  

Could a $2.63M Long Liquidation Be Imminent?

Pepe’s open interest has dropped by 5.37%, settling at $281.25 million, a clear sign of waning confidence. Yet the funding rate has flipped positive at 0.0063%, driven by a growing number of bullish long positions.

Data shows long trades rose from 46.99% to 49.2% over 12 hours, pushing the Long/Short Ratio to 0.9685, just shy of neutrality. Currently, long positions account for 55.9% of the market, a setup that could quickly turn sour if the price dips further.

If Pepe hits $0.00000689, analysts estimate that $2.63 million in long liquidations could be triggered. This could lead to cascading sell pressure, sending the token down to $0.0000050 in a matter of hours.

Short-Term Price Targets for PEPE

As volatility increases across the broader crypto market, meme coins remain particularly vulnerable. Pepe’s immediate technical target lies at $0.0000062, the resistance-turned-support from the previous falling wedge.

If the price holds at this level and bounces, Pepe could rally back toward the 50-day EMA at $0.0000078321. But if sellers continue to dominate and long liquidations trigger, the token could nosedive to $0.0000050, marking a steep correction.

Final Thoughts

Pepe stands at a critical crossroads. With technical resistance mounting, suspicious on-chain activity raising concerns, and long positions piling up, the stage is set for a volatile breakout or a brutal liquidation event.