PEPE holds key support, but weak momentum could trigger another 10% slide

Pepe PEPE is down by nearly 1% on Monday, after falling 10% during the previous week.

The weak risk appetite across the broader cryptocurrency market continues to constrain the meme coin’s rebound. 

PEPE’s derivatives indicators also present a mixed picture, with declining Open Interest signaling reduced participation while a positive funding rate suggests that some traders are rebuilding bullish positions.

From a technical perspective, PEPE must defend the critical support level at $0.00000255. A decisive break below this floor could expose the token to losses of more than 10%.

PEPE derivatives data signals uncertain retail demand

Retail participation in PEPE remains uncertain despite the token’s mild intraday recovery.

According to CoinGlass, PEPE futures Open Interest has declined by more than 5% over the past 24 hours to $193.99 million. 

Falling Open Interest indicates that traders are closing positions or reducing their exposure, resulting in a lower notional value of outstanding futures contracts.

Liquidation data also shows that bullish traders absorbed most of the recent losses. Long liquidations reached approximately $328,070 over the past 24 hours, considerably higher than the $39,240 in short liquidations. 

The imbalance indicates that the recent price volatility primarily forced leveraged bullish positions out of the market.

Declining Open Interest combined with elevated long liquidations suggests that PEPE’s bullish positioning remains fragile and vulnerable to another downside move.

Despite weakening Open Interest, PEPE’s funding rate has improved. The funding rate rose to 0.0098% from -0.0100% on the previous day. 

A positive rate means traders holding long positions are paying those with short positions, generally indicating greater demand for bullish exposure.

The sharp recovery suggests that some traders expect PEPE’s downside to become more limited or anticipate a short-term rebound.

However, the positive funding rate has yet to translate into a broader increase in Open Interest. 

Stronger participation and sustained buying pressure would be required to confirm a more durable shift in market sentiment.

PEPE holds critical support at $0.00000255

PEPE is underperforming on Monday after declining 10% last week. The meme coin continues to hold the crucial support level at $0.00000255, corresponding with its July 8 low.

Its ability to defend this level supports the possibility of a short-term rebound. However, PEPE remains trapped within a consolidation range capped by the June 15 high at $0.00000314.

A recovery toward this upper boundary would require stronger buying momentum and an improvement in broader cryptocurrency market conditions.

Technical momentum remains weak despite Monday’s price increase. The Relative Strength Index stands at 35, approaching the oversold region. 

This indicates that selling pressure remains dominant, although PEPE has not yet entered oversold territory.

The Moving Average Convergence Divergence indicator also continues to trend below the zero line. 

Its expanding negative histogram signals strengthening bearish momentum and reduces confidence in the sustainability of the current recovery.

These readings suggest that PEPE’s rebound could remain limited unless momentum improves significantly.

The $0.00000255 level remains decisive for PEPE’s near-term outlook. A daily close below this support would invalidate the developing rebound and expose the July 1 low at $0.00000223. 

A move to that level would represent a decline of more than 10% from the current support area.

Conversely, continued consolidation above $0.00000255 could allow buyers to strengthen their position and attempt a recovery toward the $0.00000314 resistance level.

Until momentum indicators improve and Open Interest begins to recover, PEPE’s short-term outlook is likely to remain cautious.