- Memecoins have lost nearly $8B in 2026, but PEPE’s social activity and sentiment remain strong.
- PEPE is back at a key 2024 support zone, with Open Interest rising to $221M.
- Negative funding and whale accumulation suggest a short squeeze could be forming toward $0.0000065.
The memecoin market is still doing what it does best: reminding everyone that tokens with no real utility don’t behave like “normal” assets, especially when the mood turns ugly.
But what’s different this time is the tone. In past cycles, fear and chaos often pulled money into memes anyway. People would rotate into them for quick pumps, even while the rest of the market was shaky. In 2026, that dynamic is clearly breaking. The data pretty much confirms it.
Memecoins Are Bleeding, and the Sector Hasn’t Found a Floor Yet
According to CoinMarketCap, the memecoin sector has already lost close to $8 billion in 2026 alone, sliding into multi-year lows. Some tokens are down over 60%, and the list of “survivors” is getting shorter by the week.
Even the OGs aren’t immune. Pepe (PEPE), one of the biggest names in the meme cycle, is down around 47% over the same period. That’s a rough drawdown for something that was once treated like the poster child for viral momentum.
And yet… PEPE isn’t dead. Not socially, at least.
Social activity around the token is still surprisingly strong. Recent tweets reportedly hit 888, and positive sentiment jumped to 80.95%. That’s a strange combination: brutal price action, but a community that still refuses to go quiet.
The Chart Is Back at a Level That Matters
According to AMBCrypto, the timing here is important.
On the chart, PEPE has retraced all the way back to its early April 2024 support zone, sitting around $0.0000035. That level isn’t just a random line. During the 2024 cycle, that exact support triggered a huge rally of roughly 152%.
That’s why traders are paying attention. Memecoins can look completely dead… until they aren’t. Momentum can flip violently, and it usually happens when people stop expecting it.
What’s adding fuel to this idea is derivatives positioning. PEPE’s Open Interest is rising again, adding nearly $30 million in fresh positions this week. That’s about a 15% jump, pushing total OI to roughly $221 million.
When open interest climbs while price is sitting on a historical support, it usually signals one thing: traders are positioning for a move. The only question is whether they’re leaning long, or stacking shorts.
Could PEPE Be Setting Up a Classic Bear Trap?
With PEPE down around 40% this month, the “bottom” narrative is starting to sound less ridiculous. Not guaranteed, but less ridiculous.
If anything, this setup has the ingredients for a classic bear trap. That’s when price looks weak enough to encourage heavy shorting, then snaps upward and forces shorts to cover, creating a sharp squeeze.
And the on-chain metrics are starting to hint that something like that could be building.
On-Chain Data Points Toward a Short Squeeze Setup
Several signals are lining up in a way that makes PEPE hard to ignore, even in a weak memecoin environment.
Arkham Intelligence recently flagged a divergence between spot and perpetual positioning. At the same time, PEPE’s Funding Rate has flipped negative, suggesting traders are heavily shorting the token and betting on further downside.
That’s where things get dangerous for bears.
Santiment data also shows the top 100 PEPE wallets have accumulated around 23.02 trillion PEPE tokens since the October crash. That’s not retail gambling. That’s whales quietly building positions while the chart looks awful.
The effect is already showing up in relative strength. PEPE/BTC is reportedly up about 4.3% intraday, which suggests PEPE is starting to outperform Bitcoin in the very short term. That’s usually one of the first signs of a rotation.
Final Thoughts: The Setup Looks Like a Trap, but It Needs Confirmation
Taken together, this is the kind of structure that often leads to violent squeezes.
Rising open interest, heavy whale accumulation, strong social engagement, and a negative funding rate — all sitting on top of a historically important support zone — doesn’t happen by accident. It’s the kind of setup where shorts feel confident, until suddenly they don’t.
If this trend holds over the next few days, PEPE could push through its near-term resistance around $0.0000065. If that breaks cleanly, the token could easily attempt an April-style surge, because memecoins don’t really “walk” upward… they teleport.
It’s still risky. It’s still a memecoin. But right now, PEPE is flashing the kind of signals traders watch when a bear trap is being built in real time.
