The cryptocurrency market is currently experiencing substantial selling pressure, with both Bitcoin (BTC) and Ethereum (ETH) seeing significant drops of over 23% and 29% respectively in the last 30 days. This market correction has led to a sharp selloff in major memecoins, and Pepe (PEPE) has been particularly hard-hit as overall market sentiment remains weak.
PEPE has experienced a decline of nearly 41% after confirming a significant breakdown in its price structure. This breakdown has pushed the cryptocurrency into a crucial support region, which is expected to play a pivotal role in determining its next major price direction.
Head and Shoulders Breakdown Signals Trend Shift
Analyzing the weekly timeframe, PEPE had been developing a classic head and shoulders pattern. This pattern is widely recognized as one of the most reliable bearish reversal structures in technical analysis. The formation, comprising a left shoulder, a head, and a right shoulder, became clearly identifiable, with the peak around $0.00001632 in May marking the apex of the cycle. Following the failure of the right shoulder to achieve a higher high, the momentum began to wane rapidly.
The neckline of this bearish pattern was situated near the $0.0000059 level, a price point that had previously served as a multi-week base for PEPE. The price action confirms that PEPE decisively broke below this neckline, accompanied by strong bearish trading volume, which officially triggered a downside breakdown. After losing this critical support area, the price continued its descent, reaching the key weekly support range between $0.00000389 and $0.0000042. This zone is now acting as the critical line between potential stabilization and further capitulation.
This particular price zone represents the last significant historical support level observable on the weekly chart. Therefore, its defense by buyers is of extreme importance for the cryptocurrency's price stability.
What Comes Next for PEPE?
The market is now closely watching the reaction of PEPE's price within this identified support band. A temporary relief bounce is a possibility if buyers intervene aggressively and attempt to push the price back up to retest the breakdown zone around $0.0000059. Such a move from the current price levels would signify an upside potential of nearly 48%, which could temporarily halt the ongoing downtrend.
However, should the current support level fail, and PEPE closes a weekly candle below $0.00000389, a scenario of continued bearish momentum becomes the dominant outlook. A break below this level would remove crucial structural support from the chart, potentially initiating a cascading selloff and exacerbating the current decline.
For the time being, the retest zone and the outcome of the weekly candle close hold the key to determining PEPE's future directional clarity.