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

Could Bitcoin (BTC) beryllium headed for an imminent pullback? Some crypto marketplace observers judge the reply could beryllium hiding wrong the terms enactment of a frog-themed memecoin.

In an Oct. 27 station connected X (formerly Twitter), Onchain Capital co-founder and Crypto Banter big Ran Neuner suggested that memecoin Pepe (PEPE) is simply a beardown indicator of overblown crypto marketplace fever.

If you privation to cognize erstwhile a propulsion backmost is coming, conscionable ticker $PEPE. It’s virtually an scale for erstwhile the marketplace is getting overheated. When radical are assured capable to spell determination and it pumps, that’s your motion to exit. Works each time. pic.twitter.com/vMcqiddHwp

— Ran Neuner (@cryptomanran) October 26, 2023

“If you privation to cognize erstwhile a propulsion backmost is coming, conscionable ticker $PEPE. It’s virtually an scale for erstwhile the marketplace is getting overheated,” said Neuner.

“When radical are assured capable to spell determination and it pumps, that’s your motion to exit. Works each time.”

Pepe precocious witnessed a much than 100% gain, increasing from $0.00000064 connected Oct. 20 to a highest of 0.00000134 connected Oct. 27. Around the aforesaid clip Pepe reached its peak, Bitcoin had already begun sliding downward from a just-attained twelvemonth high. 

Neuner’s mentation has been shared by different crypto traders successful the past. On Sept. 23, trader AlexRTB told his 60,000 followers that helium had begun utilizing Pepe arsenic a reliable metric for impending short-term declines.

— Alex RT₿ (@rutradebtc) September 22, 2023

However, the mentation besides attracts a just stock of skeptics, portion the information hasn’t ever supported the theory.

Dubai-based trader Reetika told Cointelegraph that Pepe’s caller uptick was mostly driven by bullish quality regarding changes successful the squad and the information that it would beryllium burning further tokens, and wasn’t needfully a motion of broader overconfidence successful the market.

— Pepe (@pepecoineth) October 24, 2023

As comparative information from TradingView shows, the terms of Pepe is often tightly correlated with that of Bitcoin, which could marque it challenging to usage the memecoin arsenic an indicator.

Comparative terms enactment of PEPE vs BTC since the inception of Pepe. Source: TradingView

Reetika, meanwhile, suggested looking astatine Solana (SOL) arsenic a perchance much reliable predictor.

“SOL has been a precise bully starring indicator for the moves truthful far. It has breached retired of resistances astatine slightest a time earlier BTC/ETH implicit this full move. I've been utilizing it actionably for estimating upside,” she said.

Reetika nevertheless clarified that the SOL isn’t a cleanable indicator either, but had performed good connected the astir caller move.

Similarly, marketplace commentator and avid crypto shitposter Poordart, told Cointelegraph that Pepe astir apt isn’t the champion metric from which to gauge the aboriginal terms enactment of majors similar Bitcoin.

In Poordarts’ view, Pepe is inactive acold excessively caller to the marketplace to person immoderate “real lasting value” arsenic a reliable metric to gauge the terms movements of Bitcoin with immoderate important accuracy.

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