PEPE’s recent price decline has led to a wave of liquidations for traders holding long positions in the meme coin’s futures market. Over the past three days, more than $7 million worth of long positions have been liquidated, marking substantial losses for bullish traders.
If the downtrend continues in the short term, PEPE long holders may face further losses. Here’s why.
PEPE’s Struggling Price Leads to $7.7M in Liquidations
PEPE’s price has fallen consistently over the past few days. The meme coin trades at $0.000017 at press time, noting a 14% price fall in the past seven days.
The price decline has sparked a wave of PEPE long liquidations in the futures market, totaling $7.73 million since January 6, according to Coinglass data.
Liquidations happen in an asset’s derivatives market when its price moves against a trader’s position, forcing the position to close due to insufficient funds to sustain it.
Long liquidations occur when traders betting on a price increase are compelled to sell the asset at a lower price to cover their losses. This typically happens when the asset’s value drops below a critical level, pushing long traders to exit the market.
Additionally, PEPE’s open interest has decreased in recent days. This highlights the low trading activity around the meme coin and contributes to its ongoing price decline. As of this writing, it is at $503 million, falling by 19% in the past week.
Open interest refers to the total number of outstanding contracts or positions in a particular asset’s derivatives market that have not yet been settled. When it falls, it indicates that traders are closing their positions, signaling reduced market participation.
PEPE Price Prediction: Bearish Momentum Persists
PEPE continues to trade below a descending trendline on a daily chart. This pattern is formed when an asset’s price makes a series of lower highs, indicating a downward trend.
When an asset trades below this line, it signals sustained bearish momentum and indicates that further downward pressure on the price is likely. If this trend continues, PEPE’s price could drop to $0.000015.
Conversely, if buying pressure gains momentum, the meme coin’s price could break above the descending trendline, which forms resistance at $0.000020.
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