The local resistance level at $0.0000420 is likely to provide a selling opportunity upon retest.
The Baby Doge coin continued its downward trend, losing 2% in the last 24 hours. It has dropped about 21% from its December highs.
Meanwhile, the recent 5% recovery of Bitcoin from $85,500 on Friday to $89,700 on Monday did not help support the bulls of the famous meme coin.
Data from Coinalyze showed that open interest has slowly decreased since December 20, from $121.5 million to $114.5 million. Along with the short-term sideways price action, this indicates bearish sentiment within the PEPE market and a complete lack of bullish confidence.
A previous report earlier this month highlighted that the long-term trend for PEPE is bearish. This conclusion has not yet been disproven. Here’s what PEPE traders can monitor in the coming days.
### Identifying the Bearish Trend Strength Behind the Meme Coin
The daily chart showed that another bearish structural break occurred last week, on Wednesday, December 17. This break originated from the supply zone of $0.000044-$0.000050 (red box).
Any retest of the supply zone is likely to result in rejection. This is because momentum favors the bears, as indicated by the Relative Strength Index (RSI) reading at 40.
The Accumulation/Distribution (A/D) line has not stopped declining since the beginning of November, another sign of ongoing selling pressure.
The hourly chart showed a bearish structure, and the RSI also leaned bearish. The most concerning aspect is the continuous decline in the Accumulation/Distribution line over the past week, highlighting that selling pressure has not eased.
### Exploring the Bullish Scenario
This is the least likely scenario in the coming days.
Across multiple timeframes, momentum and volume have been bearish, making a bullish breakout unlikely. The 5% bounce in Bitcoin [BTC] also had no bullish impact on PEPE.
### Call to Traders - Stay Bearish
As shown on the hourly chart, a bounce to $0.0000420 would provide a selling opportunity. If this area turns into support, the next Fibonacci retracement levels will be ones to watch.
It is drawn based on the latest swing action, which is at $0.0000452 and $0.0000476.
### Final Thoughts
- The price action of PEPE has remained strongly bearish despite Bitcoin’s recent bounce.
- There are three key short-term resistance levels to watch, as PEPE is likely to see bearish reactions from them in the coming days.
Disclaimer: The information provided does not constitute financial, investment, trading, or any other type of advice, and is the opinion of the author only.
