Funding rate reversed, whales accumulating: Is PEPE about to have a big breakout?

Pepe (PEPE) is sending notable recovery signals as the price bounces back from the key support zone – a move indicating that new buying pressure is gradually returning to the market. This memecoin symbolized by the frog continues to trade within a narrow accumulation zone, while also receiving support from the derivatives market with the funding rate turning positive. The improvement in investor sentiment, along with positive technical signals, is reinforcing the outlook for a new upward wave in the upcoming sessions.

The optimistic sentiment towards Pepe is increasing

Data from CoinGlass regarding the funding rate based on OI weight shows that the number of traders betting on a bearish scenario for PEPE has decreased, while the number of positions expecting a price increase has slightly risen.

The index reached 0.0104% on Monday, after switching from negative to positive on Friday – a sign that the Long side is now willing to pay fees to the Short side, reflecting a more positive market sentiment. Transaction history also shows that whenever the funding rate of PEPE reverses from negative to positive, the price often experiences strong surges, as was the case on July 7th.

Funding rate chart of PEPE | Source: Coinglass## Price forecast for PEPE: Testing the important support zone

On the weekly frame, PEPE tested and bounced off the support zone around 0.000011 USD last week. Moving into this week, this memecoin recorded a slight increase, surpassing the threshold of 0.000012 USD on Monday.

If the support zone of 0.000011 USD continues to be maintained, PEPE may extend its recovery momentum and aim to retest the 50% Fibonacci retracement level, measured from the peak in December ( at 0.000028 USD) to the bottom in March ( at 0.000005 USD), corresponding to around 0.000016 USD – which is an increase of nearly 30% from the current price.

The RSI indicator on the weekly frame is currently at 54, slightly above the neutral threshold of 50, reflecting the market's hesitation. To maintain the upward momentum, the RSI needs to clearly exceed this zone. Meanwhile, the MACD on the weekly frame has shown a bullish crossover since the beginning of May, while the green histogram bars continue to expand above the zero line – a sign reinforcing the upward trend of PEPE.

Weekly chart of PEPE/USDT | Source: TradingViewOn the daily frame, PEPE was rejected at the resistance zone of 0.000014 USD on Tuesday and dropped more than 13% in the two days following. However, the coin bounced back after testing the 50-day EMA around 0.000011 USD on Friday – which also coincides with the previously broken downtrend line – reinforcing its role as an important support zone. As of the time of writing on Monday, PEPE is fluctuating around 0.000012 USD.

For external investors looking for accumulation opportunities, the zone of 0.000011 – 0.000012 USD is considered a potential price area. If the buying pressure continues to be maintained, PEPE may extend its recovery momentum towards resistance near 0.000014 USD. A firm close above this level will open up further upside potential to 0.000016 USD, coinciding with the weekly target previously analyzed.

The RSI indicator on the daily frame is currently at 56, having bounced up from the neutral threshold of 50 at the end of last week and is trending upwards, indicating that the bullish momentum is strengthening.

Daily chart PEPE/USDT | Source: TradingViewAccording to Global In/Out of the Money (GIOM) from Sentora (formerly IntoTheBlock), about 34,690 addresses are holding a total of 80.19 trillion PEPE with an average purchase price of 0.000011 USD. This large number of investors has been accumulating tokens in the range of 0.000011 – 0.000012 USD, reinforcing this as an important on-chain support zone.

Notably, from a technical analysis perspective, the level of 0.000011 USD also coincides with the key support zone mentioned earlier. The consensus between on-chain data and technical analysis further increases the likelihood that this is an important reversal zone to closely monitor.

GIOM chart of PEPE | Source: IntoTheBlockLilly