Pepe Targets Higher Low Formation Following Local Rejection – Could a 35% Rally Be Ahead?

Pepe is facing resistance, but this potential rejection may signal the start of a bullish continuation pattern. Traders are on the lookout for a possible higher low that could pave the way for a significant upward shift.

The price action of Pepe (PEPE) is currently navigating a local resistance zone, which isn’t necessarily bearish but could serve as a launchpad for bullish continuation. This area of resistance corresponds with the 0.618 Fibonacci retracement level and the value area high from the local range, positioning it as a strong contender for a healthy rejection. Instead of anticipating a sharp downturn, this scenario suggests a retracement that could form a higher low — a traditional bullish continuation indication, should it be confirmed by follow-through buying.

Key Highlights

• Pepe is testing a local resistance zone around the 0.618 Fib level and value area high.
• A rejection could prompt a sweep of swing low liquidity near the point of control.
• The bullish structure remains valid if a higher low is established and price recaptures support.

If this rejection unfolds as anticipated, the price action is likely to rotate down toward the point of control region, which also coincides with the VWAP support level, thereby creating significant technical confluence. Since last Wednesday, liquidity has been accumulating beneath the current range, and a sweep of that liquidity would align with a swing failure pattern (SFP). If the price breaches that swing low but swiftly re-establishes above it, this would validate a higher low structure on the local timeframe — a robust bullish signal that sets the scene for a rally toward the recent swing high.

This move could result in a potential 35% upside, assuming broader market conditions remain supportive. It’s crucial to highlight that this pattern heavily depends on a favorable macro environment, especially the strength of major assets like Bitcoin and Ethereum. If those assets continue to trend upwards, Pepe is likely to respond positively from support. Conversely, if the point of control gives way and VWAP support fails, the scenario may shift towards testing lower levels again, potentially invalidating the higher low outlook.

At present, market dynamics still lean towards bullish continuation. The price structure remains intact, and the reaction around this technical zone will be crucial. The presence of confluence — including the 0.618 Fibonacci retracement, value area low, and point of control — positions this area as a compelling candidate for a foundation before the next upward leg. If this setup falters, it would merely validate another lower high and the potential for a lower low. However, the current structure and liquidity dynamics suggest a bounce is more likely.

Looking Ahead: What to Expect in Upcoming Price Movements

As long as Pepe finds support near the point of control and the VWAP confluence, the structure supports the formation of a higher low. If this is confirmed, traders can look forward to a move back toward the swing high, suggesting a potential 35% upside. However, failing to maintain this area will shift the bias to bearish and open the pathway for additional downside.