Can Pepe coin price rise 35% as smart money holders begin to sell?

Pepe coin has shown significant resilience in the market after dropping to a monthly low of $0.0000144 in December. The coin has made a notable recovery, climbing to a high of $0.00002175, a 50% increase from its low point, marking its highest level since December 18. This surge aligns with a broader recovery across the meme coin market, where even larger coins like Dogecoin have experienced substantial growth—rising by over 20% in the past week—while several smaller meme coins, including ai16z, Fartcoin, and SPX6900, have soared by more than 50%. The overall cryptocurrency market cap has also seen an upward trend, crossing the $125 billion mark.

Pepe’s impressive rise has been further supported by data showing signs of accumulation. According to insights from Nansen, the number of tokens held on exchanges has dropped by 0.70% in the past week, with the total supply on exchanges falling to 56%. This shift in supply dynamics suggests that a portion of the market is showing confidence in Pepe’s long-term potential and removing tokens from exchanges in favor of holding them.

Despite these positive indicators, a key risk for Pepe’s continued rise is the noticeable decline in “smart money” participation. “Smart money” holders refer to experienced and well-capitalized investors who tend to have a significant impact on a token’s price movement. Nansen’s data shows that the number of smart money holders for Pepe has dropped from 107 in November to just 87 today, signaling a potential loss of confidence from this investor group. Furthermore, the total amount of Pepe tokens held by these investors has decreased to 6.9 trillion, the lowest level seen since January of the previous year.

The decline in smart money participation may be attributed to several factors. One major reason could be that many meme coin investors are diversifying their portfolios into newer meme coin projects that are gaining popularity, such as Pudgy Penguins, Fartcoin, and Peanut the Squirrel. The growing number of meme coins could be fragmenting the market and diverting attention from established tokens like Pepe, which is facing increased competition for investor interest.

Looking at the technical side of things, Pepe coin’s recent price movement has formed a bullish hammer candlestick pattern at the $0.0000144 level in December. The hammer pattern is often seen as a reliable reversal signal, where the price initially drops but then rebounds sharply, creating a small body with a long lower shadow. This pattern suggests that the token could see a continuation of its upward momentum, especially considering it is part of a break-and-retest setup. The price initially fell to $0.00001720, which acted as the upper side of a cup and handle formation, but now the coin has managed to push higher.

Furthermore, Pepe coin has maintained its position above both the 50-day and 200-day Exponential Moving Averages (EMAs). When a token is trading above these key moving averages, it generally indicates positive market sentiment and a bullish outlook. The Murrey Math Lines indicator also supports this bullish thesis, showing that Pepe is crossing a weak stop-and-reverse point, signaling a potential for further price increases.

Given these technical indicators, the likelihood of a continued upward trend for Pepe coin is strong. The next key resistance level to watch is its all-time high of $0.00002840, which would represent a 35% increase from its current price. If the coin successfully breaks above this level, it could continue to soar, potentially reaching the extreme overshoot point of $0.00002980. This price target would mark a significant milestone in the coin’s journey and could further fuel investor optimism.

However, despite the positive technical analysis and growing signs of accumulation, the risk remains that the reduction in smart money participation could potentially weigh on the coin’s longer-term growth. The broader meme coin market is increasingly fragmented, with investors spreading their bets across numerous newer projects. As a result, while Pepe coin’s recovery is encouraging, it will need to maintain its appeal to both retail and institutional investors to sustain its momentum and reach new all-time highs.