PEPE Memecoin at Crossroads: Historical Patterns and the Anticipation of a Breakout

As of April 22, 2025, PEPE, the memecoin that once captivated the crypto community with its volatile rallies, finds itself at a critical juncture. Analysts note the coin is retracing its historical price movements, sparking debates about whether it can break free from its cyclical patterns. ’The market is watching closely,’ remarked one trader, highlighting PEPE’s ’defiant stance’ against broader market trends. The catch? PEPE’s current consolidation phase mirrors its behavior in late 2023, when it surged over 300% following a prolonged lull. Ironically, its liquidity pools now rival those of established altcoins, a testament to its lingering appeal. With its ATH still in sight, the question remains: can PEPE defy expectations once more, or will it succumb to the same speculative forces that shaped its past?

Bullish break could be the start of a rally

The PEPE/WETH chart, which closely resembles the popular PEPE/USDT chart, revealed that a major rally may have begun. Especially since the price formed a pattern that has led to large breakouts on three separate occasions in the past. 

This bullish structure is a descending channel, characterized by a support line and a resistance line, with each rally beginning after a breach of the upper resistance.

Source: TradingView

At the time of writing, PEPE had broken through this upper resistance, leading to its 24-hour gains. That’s not all though as projections from its press time level hinted at a possible rally of 273%. This could push the asset to $0.00002786.

However, it’s important to note that the rally to this projected level may not happen directly. Instead, the price could consolidate—similar to what occurred after the breakout of the second pattern—before reaching its target.

Sentiment stays high

Here, it’s worth pointing out that market sentiment has remained strong. In fact, the overall trading volume increased by 38.17% to hit $896 million.

A hike in volume, alongside a price surge, usually indicates strong market momentum and shows that the asset may be gearing up for a major move upwards.

In the Futures market, Open Interest was elevated, with $348 million worth of PEPE contracts open.

Now, ehile this metric represented the total contract size, it doesn’t directly reflect bullish or bearish sentiment. To better gauge market direction, AMBCrypto used the Open Interest (OI) Weighted Funding Rate.

Source: Coinglass

This metric, which combines Open Interest and funding rate data in derivatives, helps determine whether sentiment leans bullish (positive) or bearish (negative). In this case, it has stayed positive over the past three days, with a press time reading of 0.0093%.

If the metric continues to remain positive, PEPE could climb higher and potentially hit its price target.

Profit-taking could delay PEPE’s rally

Finally, spot traders appeared to be hesitant to support the projected rally. Especially as they began to sell following the bullish breakout. When this kind of selling follows noticeable price gains on the chart, it often means that traders are taking profits.

At the time of writing, spot traders had sold $8 million worth of PEPE. This trend may continue if the price climbs higher since stronger gains offer more incentives to sell.

Sustained selling will likely delay PEPE’s price breakout, allowing for more consolidation before the next major move.