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

nestorsauer8 27. October 2023 0

Could Bitcoin (BTC) be headed for an imminent pullback? Some crypto market observers believe the answer could possibly be hiding inside the value motion of a frog-themed memecoin.

In an Oct. 27 submit on X (previously Twitter), Onchain Capital co-founder and Crypto Banter host Ran Neuner prompt that memecoin Pepe (PEPE) is a robust 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,” stated Neuner.

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

Pepe lately witnessed a greater than 100% achieve, rising from $0.00000064 on Oct. 20 to a peak of 0.00000134 on Oct. 27. Around the identical time Pepe reached its peak, Bitcoin had already begun sliding downward from a recently attained yearly high.

Neuner’s concept has been shared by different crypto merchants in the previous. On Sept. 23, dealer Alex RTB instructed his 60,000 followers that he had begun utilizing Pepe as a dependable metric for impending short-term declines.

However, the concept additionally attracted its fair proportion of skeptics, who declare the information hasn’t at all times supported the concept.

Related: BTC price pullback after $35K? Bitcoin funding rates turn ‘grossly positive’

Dubai-based dealer Reetika instructed Cointelegraph that Pepe’s current uptick was largely pushed by bullish information relating to modifications in the group and the incontrovertible fact that it will be burning extra tokens and that it wasn’t essentially an indication of broader overconfidence in the market.

As comparative information from TradingView reveals, the value of Pepe is usually tightly correlated with that of Bitcoin, which may make it difficult to make use of the memecoin as an indicator.

Comparative value motion of PEPE vs. BTC since the inception of Pepe. Source: TradingView

Reetika, in the meantime, prompt taking a look at Solana’s SOL (SOL) as a probably extra dependable 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 stated.

Reetika, nonetheless, clarified that SOL isn’t an ideal indicator both however had carried out properly on the most up-to-date transfer.

Similarly, market commentator and avid crypto shitposter Poordart instructed Cointelegraph that Pepe in all probability isn’t the greatest metric from which to gauge the future value motion of majors like Bitcoin.

In Poordarts’ view, Pepe is nonetheless far too new to the market to have any “real lasting value” as a dependable metric to gauge the value actions of Bitcoin with any important accuracy.

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