PEPE holds critical support at $0.00000255, faces weak momentum and 10% downside risk

Derivatives data show mixed market signals

PEPE’s derivatives markets reveal uncertainty among retail traders. According to data from CoinGlass, the token’s futures Open Interest dropped by over 5% in the past 24 hours to reach $193.99 million. This decline suggests that participants have exited positions or reduced their exposure, resulting in a smaller total value of outstanding PEPE futures contracts.

Long liquidations, which occur when leveraged bullish positions are forcibly closed due to price drops, reached approximately $328,070 in the same period, outpacing the $39,240 in short liquidations. This imbalance signals that recent price volatility has hurt bullish traders more severely and forced many to close out their leveraged bets.

The combination of falling Open Interest and significant long liquidations points to fragile bullish sentiment and an elevated risk of further declines if bearish pressure persists.

PEPE’s derivatives activity signals shifting trader sentiment, as long positions suffered notable liquidations and Open Interest fell to $193.99 million amid ongoing uncertainty.

Despite the weakening Open Interest, PEPE’s funding rate has risen to 0.0098%, up from -0.0100% the previous day. A positive funding rate represents a scenario where traders with long positions pay those with short positions, typically indicating mounting demand for bullish exposure.

This quick turnaround in the funding rate suggests that some traders are looking for a potential short-term rebound or are betting that further downside risk is limited. However, this increase has not yet led to a broader resurgence in Open Interest, signaling that conviction among market participants remains tepid.

Mini dictionary: Open Interest, the total number of outstanding derivatives contracts such as futures or options, often used as an indicator of market activity and trader participation.

Strong participation and steady buying interest would be needed to validate any sustained shift in sentiment for PEPE.

Technical analysis highlights decisive support level

On Monday, PEPE continued to underperform after last week’s steep drop, but it managed to defend the critical support level at $0.00000255. This level aligns with the low point set on July 8, which has become a key technical reference for traders monitoring short-term price direction.

Holding above this support offers grounds for a possible short-term recovery, but PEPE remains range-bound below resistance at $0.00000314, set on June 15. A move back toward this upper boundary would require a significant uptick in buying interest and broader strength across the crypto market.

Momentum indicators show continued weakness despite the modest rebound. PEPE’s Relative Strength Index (RSI) stands at 35, nearing the threshold of the oversold region and signaling that selling pressure remains dominant.

In addition, the Moving Average Convergence Divergence (MACD) indicator stays below the zero line with an expanding negative histogram, reflecting intensifying bearish momentum and casting doubt on the sustainability of any near-term recovery.

The outlook for PEPE remains cautious unless market momentum improves substantially and Open Interest rebounds. If PEPE closes below $0.00000255, the support would shift to the July 1 low at $0.00000223, marking the potential for a further decline exceeding 10% from current levels. Conversely, consolidation above $0.00000255 would enable buyers to attempt another push toward $0.00000314, but this move depends on stronger overall sentiment and technical confirmation.

Until key momentum metrics recover and Open Interest shows renewed strength, PEPE’s immediate trajectory is likely to remain uncertain and subject to further volatility.