Bitcoin (BTC) may be on the verge of a pullback, according to some observers in the crypto market. These observers believe that the key to predicting this pullback can be found in the price action of a frog-themed memecoin called Pepe (PEPE).
Ran Neuner, co-founder of Onchain Capital and host of Crypto Banter, recently took to Twitter to suggest that Pepe is a strong indicator of an overheated crypto market. He claimed that when people are confident enough to invest in Pepe and it experiences a pump in price, that is a sign for investors to exit the market.
Pepe has recently seen a significant gain, growing more than 100% from October 20th to October 27th. While Pepe reached its peak, Bitcoin had already started a downward trend from its year high. Neuner’s theory has been supported by other traders in the past, with one trader even using Pepe as a metric for impending short-term declines.
However, there are skeptics who question the validity of this theory. One trader mentioned that Pepe’s recent uptick was driven by bullish news about changes in the team and the burning of additional tokens, rather than a sign of overall market overconfidence. It’s worth noting that the price of Pepe is often closely correlated with that of Bitcoin, making it difficult to rely solely on Pepe as an indicator.
Some traders suggest looking at Solana (SOL) as a potentially more reliable predictor. They believe that SOL has been a good leading indicator for price moves, breaking out of resistances ahead of Bitcoin and Ethereum. However, they also acknowledge that SOL is not a perfect indicator and may not work in every situation.
Another market commentator points out that Pepe is still relatively new to the market and may not have the lasting value or accuracy to accurately gauge the price movements of major cryptocurrencies like Bitcoin.
In conclusion, while some traders believe that Pepe can serve as an indicator for an overheated market and an impending pullback in Bitcoin, others have their doubts. They suggest considering other factors and cryptocurrencies like Solana for a more reliable prediction. As with any investment, it is important for investors to conduct their own research and consider multiple indicators before making any decisions.