- BTC has a silver lining; the sharper drawdown may have eliminated weak hands.
- Meanwhile, PEPE could still steal the show.
This month, Bitcoin (BTC) made two attempts to break above the $65,000 resistance, with both attempts followed by strong pullbacks.
The latest decline, which sent BTC to $58,000 – its lowest level in over two weeks – raised fears of a deeper correction.
Trading at $62,662 at press time, AMBCrypto warns that if a similar trend continues, Bitcoin could face further downward pressure.
However, there is a glimmer of hope. The sharper pullback may have eliminated weak hands, potentially sparking renewed interest from stronger buyers.
This cleansing effect often leads to new buildup, paving the way for a rebound.
While Bitcoin has struggled, memecoins like PEPE experienced a resurgence. The PEPE increased by more than 5% in one week.
Typically, memecoins thrive during periods of market uncertainty, as traders seek out high-risk, high-reward opportunities.
But the performance of PEPE can still be linked to the price movement of Bitcoin.
BTC shows near-term potential
Currently, it appears that BTC is heading for a short-term correction, with aspire regain control of the market.
This scenario creates an ideal short squeeze condition, in which short sellers are forced to repurchase BTC, thereby increasing the value of each token.
However, this does not guarantee a rebound strong enough to position BTC for a rise to $70,000.
Over the past week, long-term holders have moved less than average, while sellers who have held BTC for less than 155 days have started to sell their holdings, as indicated by the green wig.
Source: BGeometrics
In the context of a bull market, an increase in sales often signals a potential market top. As more investors take profits, concerns are growing that a deeper pullback could take BTC below $60,000.
Conversely, if $62,000 proves to be a market bottom – with long positions dominating, LTHs remaining stable and others consider this a dip to buy – this may signal the start of an accumulation phase.
It is crucial to monitor these actions closely; any slight divergence in these trends could limit the likelihood of a rebound, which currently appears likely.
PEPE could stay in the green
Historically, memecoins have seen dramatic rebounds during Bitcoin corrections, as traders look for high-volatility opportunities in a fragile market.
However, they are also very sensitive to the broader direction of the Bitcoin market.
If BTC manages to hold its current levels and begin to recover, PEPE could see a short-term correction as traders return their focus to BTC and other large-cap assets.
On the other hand, if Bitcoin continues to weaken, PEPE could benefit from another memecoin cycle, potentially pushing it to new highs.
While many recently launched memecoins have seen double-digit gains, PEPE could also continue to stay in the green.
Source: Glassnode
Over the past three days, PEPE has risen above $0.000010 but has struggled to maintain this level.
A massive influx of 1.8 trillion PEPE tokens deposited on exchanges – the highest in three months – has made it difficult for the bulls to maintain their momentum.
This shows how volatile memecoins can be. Interestingly, as BTC pulls back, PEPE once again experiences an increase in net withdrawals, which historically signals a market bottom.
For a successful rise, consistent net outflows are crucial. If this trend breaks as BTC regains dominance, it could dampen the renewed optimism surrounding PEPE.
Realistic or not, here is the market capitalization of PEPE in terms of BTC
Overall, the market currently seems to favor memecoins. The next few days will be crucial in determining whether BTC can regain strength or whether PEPE will continue to steal the spotlight.
If so, PEPE could soon break above the $0.000010 resistance.
