PEPE has recently experienced a significant surge, attracting market attention. What are the key factors behind this rally? Let's break it down.

**Current Situation Overview**

PEPE belongs to the meme coin category, similar to Dogecoin and Shiba Inu. Its price momentum is mainly driven by market sentiment rather than technical fundamentals. The recent upward trend clearly reflects this characteristic—rapid gains accompanied by overbought indicators.

From a technical perspective, there are indeed some warning signals. The candlestick patterns indicate signs of overheating, suggesting a higher likelihood of a short-term pullback to consolidate. This may not be a bad thing; in fact, it could lay the groundwork for a future breakout.

**Two Possible Scenarios**

Optimistic Scenario: If PEPE can hold above key support levels and regain momentum after a correction, challenging its all-time high is not impossible. The nature of meme coins gives them strong upward potential under certain market conditions.

Realistic Scenario: Macroeconomic environment, policy changes, and declining market risk appetite—any of these factors could cause the meme coin sector to cool down rapidly. A correction of over 30% would require psychological resilience from investors.

**Risks to Watch**

Meme coins are inherently prone to excessive hype and short-term speculation. Entering the market requires recognizing that this is a high-volatility, high-risk sector. Regulatory uncertainty is also significant—different countries have vastly different attitudes toward meme coins.

Additionally, sometimes headlines and the main content may not fully align. It's important to extract core data and logic from complex narratives rather than being misled by clickbait titles.

**Recommendations**

Short-term trading should set clear stop-loss levels. If you haven't decided whether to participate, it’s wise to observe whether PEPE can withstand upcoming correction waves. Only through a shakeout can the true intent of the bulls be confirmed.