PEPE’s 62% Rally May Be Head-And-Shoulders Trap, Warns Analyst

The past week has seen PEPE rocket to the top of the performance charts among major cryptocurrencies. The asset’s price surged by more than 60%, a gain that significantly outpaced other top-50 cryptocurrencies by market cap. At the height of the rally on Sunday, PEPE touched $0.00000725 before retracing to approximately $0.00000676. This explosive move dwarfed the concurrent rallies in established meme tokens; Dogecoin (DOGE) and Shiba Inu (SHIB) posted more modest weekly gains of 17% and 15%, respectively.

This extreme volatility underscores the high-risk, high-reward nature of the memecoin sector, where sentiment and social media trends can drive prices independently of broader market fundamentals. The sheer magnitude of PEPE’s move, while impressive for traders who caught the upswing, has now drawn the scrutiny of technical analysts looking for signs of exhaustion or reversal. The rapid ascent has brought the coin back to a critical technical level that previously signaled a major downturn.

Beneath the surface of the green candles, analyst Ali Martinez identifies a concerning chart pattern. In a recent analysis shared on X, Martinez highlighted that PEPE was previously forming a Head-And-Shoulders pattern—a classic technical analysis formation often interpreted as a reversal signal. This pattern consists of three peaks: a central ‘head’ flanked by two lower ‘shoulders,’ with a ‘neckline’ serving as a support level.

According to the chart shared by Martinez, PEPE’s price broke down below this critical neckline last year, leading to a sustained bearish period that culminated in a low in December. The powerful rally of 2026 has now closed the distance, bringing the price back to retest that same neckline from below. While a reclaim of this level could be seen as bullish, Martinez warns of the opposite scenario. “This could be a simple retest of the breakdown before a move to $0.0000015,” the analyst noted, suggesting the rally may be a trap setting up for another leg down.

The key question now is how the price reacts at this pivotal resistance-turned-support-turned-resistance zone. A rejection at the neckline would confirm the bearish thesis, potentially validating the Head-And-Shoulders pattern’s predictive power and opening the door to the steep decline Martinez anticipates.

The cautionary signal for PEPE is not an isolated case in the currently frothy memecoin space. Martinez pointed out in a separate X post that other tokens enjoying rallies are also showing bearish technical developments. Floki (FLOKI), which surged over 40% in the past week, has triggered a sell signal on the Tom Demark (TD) Sequential indicator.

This convergence of warnings—a major pattern retest for PEPE and a momentum-based sell signal for Floki—suggests that the recent memecoin rallies may be on shaky ground. It highlights a critical lesson for traders: double-digit percentage gains over a short period, while enticing, can often precede sharp corrections, especially when they occur against the backdrop of previously established bearish technical structures. For investors in PEPE, Dogecoin, Shiba Inu, and Floki, the coming days will be a crucial test of whether bullish momentum can override these emerging technical warnings.