Pepe price has staged a strong comeback this week, soaring to its highest point since August 1. It has jumped by more than 81% from its lowest level in August, meaning that it is in a deep bull market. Here are some of the reasons why the third-biggest meme coin surged.
Correlation with other meme coins
Pepe token has soared because of the ongoing meme coin surge. Dogecoin, the biggest meme token, has soared by 20% in the last seven days.
Similarly, Shiba Inu, Dogwifhat, Brett, and Floki Inu have jumped by over 30% in this period, pushing the combined market cap of all coins to over $56 billion. Historically, meme coins tend to have a close correlation with each other.
Also, these tokens usually rise when Bitcoin is rising and vice versa. Bitcoin has rebounded to $66,000 while the Ethereum surged to over $2,700. Popular large coins like BNB, Toncoin, and Cardano have also risen.
The main reason for this price action is that the Federal Reserve and other central banks have started to slash interest rates. The Fed cut rates by 0.50% last wee, while the Chinese central bank continued its cutting cycle this week.
Other top central banks like those in Europe, Asia, and Africa have also started cutting interest rates. In addition, China has opened the floodgates of capital by unleashing several stimulus packages this week.
Cryptocurrencies and stocks do well when central banks and governments are supporting the financial market. Indeed, most global stocks have surged to their highest levels on record this week.
Arthur Hayes is bullish on Pepe
Meanwhile, many crypto investors are still bullish on Pepe. In a statement, Arthur Hayes, one of the most popular crypto investors said that he was buying the token. Data by Arkham shows that Hayes has a crypto portfolio worth over $32 million.
On-chain data shows that many big investors continued to buy Pepe. According to DeFi Llama, investors moved coins worth over $5 million on Friday, Sep. 27. In most periods, cryptocurrencies rise when whales and sharks are in accumulation mode.
Pepe price has strong technicals
PEPE chart by TradingView
On the daily chart above, we see that Pepe has some positive technicals, which have contributed to the recovery.
The token formed a double-bottom pattern – a highly bullish sign- at $0.0000067 recently. This was an important level since it was also along the 61.8% Fibonacci Retracement point.
Pepe has now soared above the double bottom’s neckline at $0.0000098, meaning that bulls are now in control. It has also formed a golden cross pattern as the 50-day and 200-day moving averages have formed a bullish crossover. The last time that Pepe formed this pattern, its price jumped by 1,330%.
Therefore, the combination of a double-bottom and a golden cross means that the token may enter beast mode soon. If this happens, the next point to watch will be at $0.00013, its highest level on July 24, which is about 25% above the current level. A break above that point will open the chances of it retesting its all-time high at $0.000017.
Read more: Crypto Chart of the Week: The Contrarian Case for Pepe Token
