Pepe has encountered resistance, but this rejection could mark the beginning of a bullish continuation setup. Traders are monitoring potential heights that could turn a strong spinning stage up.
Pepe Price Action (Pepe) is currently facing a local resistance zone. This is not necessarily bearish in nature, but could serve as a springboard for bullish continuance. The area being tested is a strong candidate for sound rejection, with 0.618 Fibonacci retracement and high value area from local range. Rather than expecting a sharp reversal, this scenario shows potential retraces that form a higher or lower.
Key Points
Pepe is testing the local resistance region around 0.618 FIB and value area. Rejection can lead to a sweep of low-flow swings near control. Once the higher shapes and prices regain support, the bullish structure remains intact.
If this rejection is reproduced, the price action is expected to rotate towards the point of the control region, along with the VWAP support level, creating a powerful technical confluence. Liquidity has been built under the current range since last Wednesday, with its liquidity sweeping in line with the Swing Disorder Pattern (SFP). If the price lowers its swing, but quickly closes it over it, it will see a higher, lower structure in the local time frame. This is a strong bullish signal setting the stage of the rally towards the recent swing high.
Such a move could result in a 35% upside push, as long as the broader market conditions are still favorable. It is worth highlighting that this pattern relies heavily on the strength of a supporting macro environment, particularly the majors such as Bitcoin and Ethereum. As these assets continue to trend upwards, Pepe could continue with a bullish response from support. However, if that point of control is not retained and VWAP support collapses, the scenario will again shift to a drop in the level to be tested, perhaps invalidating a higher or lower paper.
For now, market dynamics are still leaning towards bullish continuation. The price structure remains intact, and the reactions around this technical realm are crucial. 0.618 Fibonacci, with a low value area and the presence of a confluence containing points of control, making this a strong candidate for the base before the next leg is high. If this setup fails, it simply checks for a possible lower height and lower value. However, current structure and fluidity profiles suggest that bounce is more likely.
What to expect from future price action
As long as Pepe finds support around points of control and VWAP confluence, the structure supports the formation of higher and lower values. If confirmed, traders can predict that they will return towards swing high, offering a potential 35% upside. However, if the area cannot be retained, the bias will turn the bears and open the door and go downside further.
