PEPE Faces Major Losses Amid Bearish Market Trend

PEPE’s ongoing price drop has resulted in significant losses for traders holding long positions in its futures market. Over the past three days, long liquidations have surpassed $7 million, dealing a blow to bullish investors betting on a recovery.

The meme coin has been on a consistent downward trend, leading to increased liquidations. In the derivatives market, liquidations occur when price movements work against a trader’s position, forcing it to close due to insufficient funds. For long traders, this happens when the price drops below critical levels, prompting them to exit their positions and cover losses.

Adding to the bearish sentiment, PEPE’s open interest has also declined in recent days, reflecting reduced trading activity. Open interest, which measures the total number of unsettled contracts in the derivatives market, has fallen significantly. This indicates that many traders are closing their positions, further dampening market participation and contributing to the coin’s downward momentum.

PEPE’s price continues to trade below a descending trendline on daily charts, a pattern that suggests sustained bearish pressure. This trendline reflects a series of lower highs, indicating that sellers remain in control. If the bearish momentum persists, PEPE’s price could drop further, putting additional pressure on long holders.

However, if buying activity picks up, the meme coin could potentially break above the descending trendline, which currently acts as a resistance level. Such a move might signal the beginning of a recovery, though it would require strong buying pressure to shift market sentiment.

The continued decline in PEPE’s price and its futures market activity underscores the challenges faced by long traders, highlighting the need for a shift in market dynamics to spark any meaningful recovery. Until then, the meme coin remains under significant pressure, reflecting ongoing bearish sentiment in the broader market.