The recent drop in PEPE prices has led to a wave of liquidations for traders holding long positions on the same coin. eventually walk. Over the past three days, more than $7 million in long positions have been liquidated, representing substantial losses for bullish traders.
If the downward trend continues in the short term, holders of long PEPE securities could suffer further losses. Here’s why.
Tough PEPE pricing leads to $7.7 million in liquidations
The price of PEPE has fallen regularly in recent days. The meme coin is trading at $0.000017 at press time, noting a 14% price drop over the past seven days.
The price drop triggered a wave of long PEPE liquidations in the futures market, totaling $7.73 million since Jan. 6, according to Coinglass data.
Liquidations occur in an asset’s derivatives market when its price moves relative to a trader’s position, forcing the position to close due to insufficient funds to maintain it.
Long liquidations occur when traders betting on a price rise are forced to sell the asset at a lower price to cover their losses. This usually happens when the asset’s value falls below a critical level, causing long traders to exit the market.
Furthermore, the open interest of PEPE has decreased in recent days. This highlights the low trading activity around the meme coin and contributes to the continued decline in its price. As of this writing, it stands at $503 million, down 19% over the past week.
Open interest refers to the total number of outstanding contracts or positions in the derivative market of a particular asset that have not yet been settled. When it falls, it indicates that traders are closing their positions, signaling reduced participation in the market.
PEPE price forecast: bearish momentum persists
PEPE continues its discussions below a descending trendline on a daily chart. This trend forms when the price of an asset reaches 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 price could drop to $0.000015.
Conversely, if buying pressure increases, the price of the same part could break above the descending trendline, which forms resistance at $0.000020.
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