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Pepe coin has entered a bear market this year after plunging 65% from its all-time high.

Pepe (PEPE), the second-biggest Ethereum (ETH) meme coin after Shiba Inu (SHIB), has plunged to the key support at $0.000010.

While its decline aligns with the broader crypto sell-off, it is also influenced by Ethereum’s ongoing underperformance.

Ethereum, the largest layer-1 blockchain, has lagged behind other major blockchains like Bitcoin and Solana. It has fallen by 5% over the past 12 months, while Bitcoin and Solana have surged by over 70%.

Ethereum has also lost market share in several sectors, including decentralized finance, meme coins, and non-fungible tokens. This trend has impacted many Ethereum-based tokens, which have underperformed as investors shift their focus to assets within the Solana ecosystem.

Ethereum is likely to surge to $4,000, as the coin has formed an ascending triangle pattern on the two-week chart. This pattern is characterized by a horizontal resistance level and a diagonal trendline composed of higher highs and higher lows.

A strong bullish breakout will be confirmed if Ethereum surpasses the $4,000 resistance level. A sustained breakout above this price could increase the likelihood of Ether reaching $5,000 in the long term.

Pepe price technical analysis

A strong Ethereum price breakout may also lift Pepe and other Ethereum-based tokens. The daily chart suggests that Pepe is positioning for a significant bullish breakout.

Oscillators such as the Percentage Price Oscillator and the Relative Strength Index have started forming a bullish divergence pattern. This divergence occurs when these oscillators trend upward while the asset’s price remains in a downtrend.

At the same time, Pepe is forming a bearish divergence pattern, which consists of two converging downward trendlines. These lines are approaching their confluence level, a point where bullish breakouts often occur.

The first key level to watch for Pepe is the 200-day moving average at $0.00001351, which represents a 35% increase from its current price. Further gains could push Pepe toward its all-time high of $0.000028, marking a 175% surge.

However, if Ethereum continues to weaken, Pepe could decline further, initially to $0.0000060 and then to $0.0000038, levels that marked its lowest swings in August and April last year.