Can PEPE kill SHIB just as Shiba Inu killed Dogecoin?
- PEPE price has dropped 17% in the last three days as it follows Bitcoin’s decline.
- From a big-picture outlook, the frog-inspired PEPE could be the SHIB-killer of the new bull rally.
- As Shiba Inu killed the original meme coin, Dogecoin, in the 2021 cycle, PEPE could do the same to SHIB.
Crypto markets are taking a break from rallying as Bitcoin (BTC) price consolidates. But altcoins are rallying massively, and meme coins take a special place right now due to various reasons. In this article, we will pay attention to the new meme coin on the block, PEPE, which has shed 17% in under 72 hours. But this downtrend has inadvertently pushed the frog-themed crypto into an accumulation zone and could now be an opportunity for long-term investors.
Read more: Pepe price remains under 50-day EMA, triggering selling spree despite hype around Dogecoin
Understanding the crypto market cycles and meme coins
Every market cycle, there is a fad that retail investors go crazy about. From 2015 to 2017, it was the Initial Coin Offering, which was followed by Security Token Offering and Initial Exchange Offering for the next two years. After the COVID-induced crash in March 2020, as the market recovered, the Compound platform’s Yield Farming idea kick-started the DeFi Summer.
Throughout these changing narratives, Dogecoin was the one and only meme coin, and it was subject to massive volatile moves. But as the 2020 cycle picked up steam, Shiba Inu (SHIB) came knocking at Dogecoin’s throne. As the hype and frenzy gripped retail investors, SHIB skyrocketed nearly 1,600% in roughly a month.
Regardless of the initial dethroning, Dogecoin has stayed relevant thanks to the devoted community and Elon Musk’s interventions. However, DOGE did not recover to its former glory and continues to reel from random spurts of volatile moves.
While most of 2023 has been bullish, meme coins, in general, have not seen much attention. Thanks to Elon Musk’s latest escapades involving the change of Twitter’s logo to “X,” Dogecoin enthusiasts have resurfaced. This stunt from the American billionaire might bring back the hype to Dogecoin temporarily, but it will inadvertently turn eyes to meme coins.
This shift in attention from mainstream cryptocurrencies to meme coins could do one of two things or both.
- Bring Dogecoin to the forefront as it once was, while PEPE and Shiba Inu take a backseat.
- Allow PEPE, the new meme coin on the block, to flourish and dethrone SHIB.
Read more on the first point: History shows why investors should pay close attention to Dogecoin price now
PEPE price shows signs of bottoming
PEPE price has declined 33% in the last 12 days and dipped into an area of interest, extending from $0.0000012635 to $0.0000009633. This area is called a bullish breaker and often facilitates a spurt in buying pressure that kick-starts the second leg of a rally.
A breaker is essentially a failed demand or supply level. A bullish breaker is formed when the supply zone between two lower lows is invalidated. As the price moves past the supply zone, it traps short sellers, and the said supply is now filled into a bullish breaker.
The reason why a bullish breaker works is because it has trapped short sellers. Hence, when a pullback in an asset’s price retests the newly formed breaker, they are given an opportunity to cover their short positions. This action then triggers a new rally.
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Bullish Breaker
For PEPE price, the bullish breaker extends from $0.0000012635 to $0.0000009633, and the midpoint of this breaker is $0.0000011134. These are key levels to watch for long-term investors. A closer look at the June 18 daily candlestick reveals that it is an order block that facilitated a 90% rally four days after it was formed. Hence, a retest of this candlestick at $0.0000010477 and the May 12 selling climax formed at $0.0000010055 are deep discount accumulation levels.
Considering our thesis explained above, accumulating PEPE at these levels makes complete sense.
Why accumulate PEPE or any meme coin now?
The 2023 bull rally has ground to a halt after Bitcoin price started its month-long consolidation. It is obvious, considering that the third quarter has historically been boring and yielded negative returns.
But the fourth quarter has been extremely good for Bitcoin investors. Proving this point is Shiba Inu and its face-melting 1,600% rally that occurred in October, the first month of the fourth quarter of 2021.
More on BTC’s historical monthly returns: Bitcoin likely to remain in red through the next quarter if history is any indication
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Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
