Pepe eyes higher low formation after local rejection — is a 35% rally on the table?

Pepe is encountering resistance, but this rejection could mark the beginning of a bullish continuation setup. Traders are watching for a potential higher low that may set the stage for a strong rotation to the upside.

Pepe price action (PEPE) is currently facing a local resistance zone, one that is not necessarily bearish in nature but could act as a springboard for a bullish continuation. The region being tested aligns with the 0.618 Fibonacci retracement and the value area high from the local range, making it a strong candidate for a healthy rejection. Rather than expecting a sharp reversal, this scenario points to a potential retrace that would form a higher low — a classic bullish continuation signal if confirmed by follow-through.

Key points

• Pepe is testing a local resistance area around the 0.618 Fib and value area high.
• A rejection could lead to a sweep of swing low liquidity near the point of control.
• Bullish structure remains intact if a higher low forms and price reclaims support.

Should this rejection play out, price action is expected to rotate down toward the point of control region, which also aligns with the VWAP support level, creating strong technical confluence. Liquidity has been building beneath the current range since last Wednesday, and a sweep of that liquidity would be in line with a swing failure pattern (SFP). If price takes out that swing low but quickly closes back above it, this would confirm a higher low structure on the local timeframe — a strong bullish signal that sets the stage for a rally toward the recent swing high.

Such a move could result in a 35% upside push, provided broader market conditions remain favorable. It’s worth emphasizing that this pattern relies heavily on a supportive macro environment, particularly strength in majors like Bitcoin and Ethereum. If those assets continue trending upward, Pepe is likely to follow with a bullish reaction from support. However, if that point of control fails to hold and VWAP support breaks down, then the scenario shifts toward lower levels being tested again, possibly invalidating the higher low thesis.

For now, the market dynamics are still leaning toward bullish continuation. Price structure remains intact, and the reaction around this technical region will be pivotal. The presence of confluence — including the 0.618 Fibonacci, value area low, and point of control — makes this a strong candidate for a base before the next leg higher. If this setup fails, then it simply confirms another lower high and the likelihood of a lower low. But the current structure and liquidity profile suggest a bounce is more probable.

What to expect in the coming price action

As long as Pepe finds support around the point of control and the VWAP confluence, the structure favors the formation of a higher low. If confirmed, traders can anticipate a move back toward the swing high, offering a potential 35% upside. However, failure to hold this region will flip the bias bearish and open the door for further downside.