Will Bitcoin (BTC) Pull Back Immediately? Some cryptocurrency market observers believe the answer may be hidden in the price action of frog-themed meme coins.
Onchain Capital co-founder and Crypto Banter host Ran Neuner said in an October 27 post on X (formerly Twitter) that memecoin Pepe (PEPE) is a strong indicator of excessive enthusiasm in the cryptocurrency market.
If you want to know when the pullback is coming, just watch $PEPE. It is actually an index for when the market is overheated. When people feel confident enough to go out there and it’s active, that’s your signal to quit. It works every time. pic.twitter.com/vMcqiddHwp
— Ran Neuner (@cryptomanran) October 26, 2023
“If you want to know when a pullback is coming, just watch $PEPE. It’s actually an index of when the market is overheating,” Neuner said.
“When people feel confident enough to go out there and it starts to work, that’s your signal to quit. It works every time.”
Pepe recently witness The increase was more than 100%, from $0.00000064 on October 20 to a peak of $0.00000134 on October 27. Around the same time Pepe peaked, Bitcoin had begun to slide off the one-year high it had just reached.
Neuner’s theory has been echoed by other cryptocurrency traders in the past. On September 23, trader AlexRTB told his 60,000 followers that he had begun using Pepe as a reliable indicator of an upcoming short-term decline.
this $PEPE Pumps are another indicator of things to come #BTC dump.
I speak from experience, you can look at past price movements.
Drawing coins is like $PEPE, $DOGE, $ripple, $IMX, $LINK Always portends a bloody battle, let’s see how it goes this time. pic.twitter.com/piseCxRiqD
— Alex RT₿ (@rutradebtc) September 22, 2023
However, the theory has also attracted its fair share of skeptics, and the data doesn’t always support the theory.
Dubai-based trader Reetika told Cointelegraph that Pepe’s recent gains have been largely driven by positive news about team changes and the fact that it will burn more tokens, which is not necessarily a sign of general market overconfidence.
6.9T $PEPE Approximately $6,000,000 worth of tokens have been burned. https://t.co/aN5LRUFz8u
A new team of advisors has been appointed to guide Pepe forward. The remaining 3.79T tokens belong to the original team CEX multi-signature wallet and are used for strategic partnerships and marketing… pic.twitter.com/JN3ssvH0XL
— Pepe (@pepecoineth) October 24, 2023
Comparative data from TradingView shows that the price of Pepe often closely correlates with the price of Bitcoin, which can make using the memecoin as an indicator challenging.
Meanwhile, Reetika suggests looking at Solana (SOL) as a potentially more reliable predictor.
“SOL has been a very good leading indicator of the move so far. It has broken resistance at least a day ahead of BTC/ETH throughout the move. I have been using it practically to estimate the upside,” she said.
However, Reetika clarified that SOL is not a perfect indicator but has performed well in recent moves.
Likewise, market commentator and avid crypto junkie Poordart told Cointelegraph that Pepe may not be the best indicator of future price movements in major currencies like Bitcoin.
In Poordarts’ view, Pepe is still too new to the market and does not have any “real lasting value” as a reliable indicator to accurately measure Bitcoin’s price movements.
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