The Pepe Coin price crashed below a crucial support level, putting it at risk of a more significant decline as the derivative market indicates a negative funding rate.
Pepe (PEPE), the second-largest Ethereum (ETH) meme coin, was trading at $0.0000100095 on Saturday, Aug. 30, which was 33% below its highest level in June.
CoinGlass data indicates that Pepe may be at risk as liquidations surge, the weighted funding rate turns negative, and open interest declines.
Pepe’s funding rate has been in a downward trend in the past few days and has now turned negative. It moved to a low of minus 0.011%, its lowest level since Aug. 24.
The funding rate is a figure that examines the fee that traders in the futures market pay to ensure the price remains close to the one in the spot market. A negative funding rate is a sign that these investors expect the future price to be lower than where it is today.
Pepe’s futures open interest has been in a downtrend. After peaking at over $1 billion in July, it has slumped to $548 million, its lowest level since June. A falling open interest and spot market volume signal that the demand is fading.
The decline has coincided with the rising liquidations, where exchanges close leveraged trade. Liquidations lead to increased selling pressure, which depresses the price.
Nansen data shows that smart money and whale investors are no longer buying. Smart money holdings have plunged by 23% in the last 30 days, while whale holdings have been flat.
The daily chart indicates that the Pepe token price has remained within a tight range over the past few days. It has crashed below the critical support at $0.0000098, invalidating the forming double-bottom pattern.
Pepe price has also moved below the lower side of the symmetrical triangle pattern. Most importantly, it has formed a death cross pattern as the 50-day and 200-day moving averages crossed each other.
Therefore, the token is likely to continue falling as sellers target the key support level at $0.0000082, its lowest point since July 22.
