fxs_header_sponsor_anchor

Is Bitcoin overheated? Some believe the answer is hiding in PEPE

Could Bitcoin (BTC $34,030) be headed for an imminent pullback? Some crypto market observers believe the answer could be hiding within the price action of a frog-themed memecoin.

In an Oct. 27 post on X (formerly Twitter), Onchain Capital co-founder and Crypto Banter host Ran Neuner suggested that memecoin Pepe (PEPE $0.000001) is a strong indicator of overblown crypto market fever.

“If you want to know when a pull back is coming, just watch PEPE. It’s literally an index for when the market is getting overheated,” said Neuner.

When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time.

Pepe recently witnessed a more than 100% gain, growing from $0.00000064 on Oct. 20 to a peak of 0.00000134 on Oct. 27. Around the same time Pepe reached its peak, Bitcoin had already begun sliding downward from a recently attained yearly high.

Neuner’s theory has been shared by other crypto traders in the past. On Sept. 23, trader Alex RTB told his 60,000 followers that he had begun using Pepe as a reliable metric for impending short-term declines.

However, the theory also attracted its fair share of skeptics, who claim the data hasn’t always supported the theory.

Dubai-based trader Reetika told Cointelegraph that Pepe’s recent uptick was largely driven by bullish news regarding changes in the team and the fact that it would be burning additional tokens and that it wasn’t necessarily a sign of broader overconfidence in the market.

As comparative data from TradingView shows, the price of Pepe is often tightly correlated with that of Bitcoin, which could make it challenging to use the memecoin as an indicator.

Comparative price action of PEPE vs. BTC since the inception of Pepe. Source: TradingView

Reetika, meanwhile, suggested looking at Solana’s SOL (SOL $32) as a potentially more reliable predictor.

“SOL has been a very good leading indicator for the moves so far. It has broken out of resistances at least a day before BTC/ETH over this entire move. I’ve been using it actionably for estimating upside,” she said.

Reetika, however, clarified that SOL isn’t a perfect indicator either but had performed well on the most recent move.

Similarly, market commentator and avid crypto shitposter Poordart told Cointelegraph that Pepe probably isn’t the best metric from which to gauge the future price action of majors like Bitcoin.

In Poordarts’ view, Pepe is still far too new to the market to have any “real lasting value” as a reliable metric to gauge the price movements of Bitcoin with any significant accuracy.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.