Could Bitcoin be headed for an imminent pullback? Some crypto market observers believe the answer could be hiding within the price action of a frog-themed memecoin.

In an Oct. 27 post on X (formerly Twitter), Onchain Capital co-founder and Crypto Banter host Ran Neuner suggested that memecoin Pepe is a strong indicator of overblown crypto market fever.

If you want to know when a pull back is coming, just watch $PEPE. It’s literally an index for when the market is getting overheated. When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time. pic.twitter.com/vMcqiddHwp

— Ran Neuner (@cryptomanran)October 26, 2023

“If you want to know when a pull back is coming, just watch $PEPE. It’s literally an index for when the market is getting overheated,” said Neuner.

“When people are confident enough to go there and it pumps, that’s your sign to exit. Works every time.”

Pepe recently witnessed a more than 100% gain, growing from $0.00000064 on Oct. 20 to a peak of 0.00000134 on Oct. 27. Around the same time Pepe reached its peak, Bitcoin had already begun sliding downward from a just-attained year high. 

Neuner’s theory has been shared by other crypto traders in the past. On Sept. 23, trader AlexRTB told his 60,000 followers that he had begun using Pepe as a reliable metric for impending short-term declines.

This $PEPE pump is another indicator of upcoming #BTC dump.I am speaking with experience, you can check past price movements.Pumping coins like $PEPE, $DOGE, $XRP, $IMX, $LINK always indicates the bloodbath, let's see how it goes this time. pic.twitter.com/piseCxRiqD

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

However, the theory also attracts a fair share of skeptics, while the data hasn’t always supported the theory.

Dubai-based trader Reetika told Cointelegraph that Pepe’s recent uptick was largely driven by bullish news regarding changes in the team and the fact that it would be burning additional tokens, and wasn’t necessarily a sign of broader overconfidence in the market.

6.9T $PEPE Tokens worth ~$6,000,000 have been burned. https://t.co/aN5LRUFz8uA new team of advisors have been brought on to guide Pepe forward. Uses for the remaining 3.79T tokens attributed to the original team CEX multi-sig wallet for strategic partnerships and marketing… pic.twitter.com/JN3ssvH0XL

— Pepe (@pepecoineth)October 24, 2023

As comparative data from TradingView shows, the price of Pepe is often tightly correlated with that of Bitcoin, which could make it challenging to use the memecoin as an indicator.

Reetika, meanwhile, suggested looking at Solana as a potentially more reliable predictor.

“SOL has been a very good leading indicator for the moves so far. It has broken out of resistances at least a day before BTC/ETH over this entire move. I've been using it actionably for estimating upside,” she said.

Reetika however clarified that the SOL isn’t a perfect indicator either, but had performed well on the most recent move.

Similarly, market commentator and avid crypto shitposter Poordart, told Cointelegraph that Pepe probably isn’t the best metric from which to gauge the future price action of majors like Bitcoin.

In Poordarts’ view, Pepe is still far too new to the market to have any “real lasting value” as a reliable metric to gauge the price movements of Bitcoin with any significant accuracy.