PEPE surges 80% then plunges for a correction: Main force closing positions signals emerge, what is the outlook?

The start of the new year’s PEPE market can be described as a “roller coaster.” After a strong surge in early January, this Meme coin leader is now facing profit-taking pressure. As of the latest data, PEPE has retraced 18% from its high, with the current price oscillating around $0.00000588, down approximately 0.6% in 24 hours. More notably, the market’s main capital is quietly shifting, with the previous largest PEPE long position closed at a loss of $314,500. This signal hints at subtle changes in market sentiment.

PEPE’s “Rapid Rise and Pullback” Overview

Reviewing the evolution of this rally, PEPE’s performance has been impressive but also exposed vulnerabilities after rapid gains.

Price trend comparison

This transition from an 80% rapid increase to an 18% correction reflects market participants reassessing Meme coin risks. Short-term sharp rises inevitably attract a lot of follow-on capital, and when gains become substantial, profit-taking by major players becomes inevitable.

Signal of Main Capital Shift

According to the latest news, the “former largest PEPE long” has closed its PEPE long position with a loss of $314,500, and shifted to a 4x leveraged long position of 5618.97 ETH (about $17.75 million), with an average entry price of $3,097.29, currently showing an unrealized profit of $330,000.

The logic behind this shift warrants deep reflection: a whale who was once firmly bullish on PEPE has chosen to exit, which usually indicates a change in confidence regarding PEPE’s future trajectory. Although the loss may be due to forced stop-loss, switching to a long ETH position suggests that this major player still has a positive outlook on the overall crypto market, just believes that PEPE’s risk-reward ratio is no longer attractive at this moment.

Technical Analysis: Support and Resistance Tug-of-War

From a technical perspective, PEPE is currently in a critical zone where support and resistance intersect, which will likely determine the short-term direction.

Key Price Level Analysis

• Upper Resistance Zone: $0.0000062 - $0.0000072 This is a supply-dense area that was repeatedly tested in November 2025. Although the rebound briefly broke through, bulls failed to establish a firm footing. Currently, $0.0000062 has become a short-term resistance level, indicating significant selling pressure above.

• Short-term Support Level: around $0.0000060 On the hourly chart, this area shows a local supply zone, combined with multiple recent highs above, limiting the rebound potential.

• Medium-term Support Zone: $0.0000044 - $0.0000050 This is a deeper demand zone. The probability of falling below this range in the short term is relatively low, provided Bitcoin remains above key psychological levels.

Indicator Signal Interpretation

On the daily chart, the A/D indicator shows significant capital inflow in early January, indicating the buying foundation has not been completely broken; momentum indicators also show no clear reversal signals, suggesting the medium-term trend remains intact. This means that although there is a short-term correction, the medium-term bullish structure still has support.

However, on lower timeframes (such as the 1-hour chart), bears still hold the advantage, explaining why the price experienced noticeable oscillation and pullback at high levels.

Market Sentiment Cooling

PEPE’s correction is not an isolated event but a reflection of the overall Meme coin sector sentiment cooling.

According to related news, during the same period, DOGE’s weekly decline exceeded 7%, while Bitcoin has been sideways around $90,000. The overall market risk appetite is becoming more cautious, implying investors are withdrawing funds from high-risk assets and shifting to more stable options (like ETH). This also explains why the former largest PEPE long position shifted to a long ETH—under a cooling market sentiment environment, reducing risk exposure has become a rational choice.

Future Outlook: Patience and Confirmation

From a strategic perspective, now is not the time to chase prices but a critical phase to wait for confirmation.

Two key signals to watch

1. Pullback to the $0.0000044 - $0.0000050 range with signs of stabilization If the price can find a bottom in this medium-term support zone and show clear rebound signals (such as increased volume, bullish divergence in indicators), it may indicate the start of a new upward cycle.

2. Price volume breakout above $0.0000072 with confirmed effective breakthrough This requires volume support and time confirmation, not a false or weak breakout. If the breakout is confirmed, it means the previous supply-dense zone has been effectively absorbed, and the upside potential reopens.

Key Preconditions

Bitcoin’s performance is crucial. As long as BTC remains above key psychological levels, the Meme coin sector can expect some emotional support. Conversely, if Bitcoin shows a significant decline, PEPE’s medium-term support levels may also face testing.

Summary

PEPE’s rise of 80% followed by an 18% correction essentially reflects a re-pricing of risk by market participants. The closing of the previous largest PEPE long signals that major capital has begun shifting, further confirming the cooling of market sentiment.

The key now is patience, not chasing prices. Technically, the medium-term bullish structure remains intact, but short-term bears are in control. If the price can find support and stabilize in the $0.0000044 - $0.0000050 range or break above $0.0000072 with confirmation, it will be a better entry point. During high volatility phases, confirmation often offers better risk-reward than chasing.